April 11, 2022
Open Source Stage Day 3 - Bitcoin 2022 in Miami
Video: https://youtu.be/OwJL0J_nPDE
00:00:00 - Intro Matt Odell
00:05:35 - Coinjoins & Coinswaps - With Ben Carman, Craig Raw, Fontaine, Nicholas Gregory
00:50:03 - Funding Open Source Bitcoin Developers - With Mike Schmidt, Adi Shankara, Ben Price, Conor Okus
01:17:10 - Lightning Payments (The Future Of Commerce) - With Andre Neves, Ben Arc, Rockstar Dev, Alyse Killeen
01:55:27 - Mempools With Wiz, Murch, Gloria Zhao, Sergej Kotliar
02:37:28 - Lightning Privacy (Concerns & Solution) - With Niftynei, Tony Giorgio, Evan Kaloudis & Shinobi
03:17:46 - Sidechains (Benefits & Tradeoffs) - With Paul Sztorc, Chad Barraford, Muneeb Ali, Diego Gutierrez Zaldivar, Burak Keceli
03:58:38 - Federated Chaumian Mints (Keynote) - With Obi Nwosu
04:12:43 - The Future of Bitcoin Privacy - With Eric Sirion & Obi Nwosu
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stream sats to the show: https://www.fountain.fm/
join the chat: https://matrix.to/#/#citadel:bitcoin.kyoto
00:00 - Intro Matt Odell
05:35 - Coinjoins amp Coinswaps With Ben Carman Craig Raw Fontaine Nicholas Gregory
50:03 - Funding Open Source Bitcoin Developers With Mike Schmidt Adi Shankara Ben Price Conor Okus
01:17:10 - Lightning Payments The Future Of Commerce With Andre Neves Ben Arc Rockstar Dev Alyse
01:55:27 - Mempools With Wiz Murch Gloria Zhao Sergej Kotliar
02:37:28 - Lightning Privacy Concerns amp Solution With Niftynei Tony Giorgio Evan Kaloudis amp
03:17:46 - Sidechains Benefits amp Tradeoffs With Paul Sztorc Chad Barraford Muneeb Ali Diego
03:58:38 - Federated Chaumian Mints Keynote With Obi Nwosu
04:12:43 - The Future of Bitcoin Privacy With Eric Sirion amp Obi Nwosu twitch
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:13:16 PM
Duration: 16732.84
Channels: 1
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Well, today's gonna be another absolute banger. Okay. We got a great group of people, great lineup.
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We have you know, I'm let me try and think of some of the panels we set up. We have,
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the next one coming up is gonna be coin joins and coin swaps,
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lightning privacy, lightning payments.
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We have a side chains panel, a mempool panel.
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So an absolute fire lineup for today.
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Keep the high signal content going over here on the open source stage.
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Once again, I just want to thank everybody who helped make this happen. I mean, there's a team of
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10, 20 people back there that no one sees. I make sure all this
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goes smoothly.
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We got all these production guys in the back.
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Really couldn't do without them.
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We also have a panel today on
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open source funding
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and raising money for developers.
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If you were here yesterday, I talked about,
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my initiative at opensats.org.
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My cofounder will be on that panel.
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What I didn't mention
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and that I should have mentioned
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is that
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we are accepting applications for projects and contributors to be listed on opensats.org.
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So if you are a contributor, if you are a developer,
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or you're a maintainer of a project, make sure you submit it so we can get you listed. We have some people listed already.
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So you can go to opensats.org. You can donate to our general fund where we contribute a 100% of the proceeds,
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to board selected projects, or you can actually choose the individual projects you want to do. Now, when you go to that donation page, some people said, oh, it says email name is required.
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That's only if you check the tax deductible.
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If you check non tax deductible, you don't have to provide us any information. You can just donate SATs directly to the cause.
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What else do I have on my homework that I'm supposed to talk about right now?
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We have raspi blitz auction happening
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at 3 o'clock.
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There's gonna be 3 Raspberry Pi Blitz nodes available for that.
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Proceeds of that auction will go 50% to Open Sats, 50%
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to RASPY blitz development.
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So if you want a really nice hardware node,
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consider coming for that,
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and supporting a good cause at the same time.
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I just wanna say that, you know, these last
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3 days, I mean, it's been 6 months in the making, 8 months in the making, has been extremely rewarding.
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You know, this is a global movement.
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A lot of times, people get caught up in a lot of drama and a lot of bullshit.
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But at the end of the day, we have passionate people around the world,
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that are moving this mission forward,
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that are contributing to open source projects,
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that are contributing to code,
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that will outlive all of us,
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and we can't do it alone. So being able to meet all of you,
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talk to you in person,
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is just really one of the most rewarding
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rewarding things. And I know it can feel exhausting at times. It can feel overwhelming.
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But, one step at a time. You know? We get through it together. And, I really do think,
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we can we can make the world a better place in a very actionable way. You know?
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So appreciate all of you.
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Unfortunately
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well, fortunately and unfortunately,
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I've been
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basically in this room
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all 3 days, so I haven't been to the main stage.
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But there was some really great talks that I heard about yesterday
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that I do if, you know
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these things, it's very hard to
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view all the content in person, so do consider checking out all the video on demand after the fact. Everything was recorded in high quality.
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I know Foday
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had a really great keynote yesterday,
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talking about his new Bitcoin
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Africa conference, which I'm really excited about. I really like
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this this blossoming communities that are happening in the developing world. They're extremely powerful.
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Had a absolutely insane freedom panel,
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that really is what this movement is about.
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So go check that out. And, of course, the guy who stole the show,
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Mahler's, Jack Mahler's had his announcement about
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nearly 50% of US merchants
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starting to accept Lightning with no KYC,
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payable from any Lightning wallet.
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And we have 2 panels today,
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Lightning Privacy and Lightning Payments,
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that are gonna be highly relevant to that conversation, so the timing could not be better.
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Anyway, with all that said,
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I love you all.
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We're gonna fucking do this thing. I hope you enjoy today.
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Huge thank you to the Bitcoin Magazine team for
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putting this all together
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and getting this this fantastic space.
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Huge thanks to our sponsor, Cash App, who also helped make this happen. This was this is not cheap. This is not cheap, and I really do appreciate it.
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And thank you to all our open source contributors
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and all around the world, especially those who couldn't make it. Appreciate you all. Let's do this.
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Hello. Hello. Hello. How's everyone doing today?
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Glad to be back here in Miami. I'm, humbled and honored to be presenting this this panel with this great cast of builders over here. It's a very important panel on CoinJoin and
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CoinSwap, which are some, you know, essential tools that,
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we can use to give Bitcoiners privacy on chain.
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My name is Evan Kaludis.
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I'm an application developer. I'm the founder of Zeus, a lightning wallet,
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and,
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I've got quite quite a cast here today. Let's let's start from the left. I got,
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Ben Carmen
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from Bitcoin Company.
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You've been working on some stuff with
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coin joins and lightning. It's called Ellen Vortex. Right? Yeah. Yeah.
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I made a proof of concept application to
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open up lightning channels inside of a coin join,
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and so hopefully, we're actually launching it soon.
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Yeah. Super exciting. Excited to play around with that.
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Next, we got Craig Roth from,
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Sparrow Wallet, which is my favorite way to manage my on chain funds.
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He's recently added support for, doing samurai Whirlpool coin join transactions,
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and,
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you've also got, like, payment stuff in there. Yeah. So it's really cool to see another wallet,
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implement those, 2 tools, and
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it's gonna be fun to get into that in a bit.
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Next up, we got Fontaine. How are you doing today, Fontaine? Good. And you?
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Great.
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So, Fontaine, you've got a iOS application fully noted,
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and, you've recently
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implemented a UI in there for managing,
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CoinJoin instances,
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or join market instances, which are a form of CoinJoin,
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that use, like, a maker taker model. Right? Correct.
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Excellent stuff. Really excited to have more tooling,
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more UI for joint market. So that's great.
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And, last up, we got Nick Gregory,
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from Mercury Wallet.
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He has a new product.
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It's a it's a state chain wallet that performs coin swaps. It's quite a bit different from,
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CoinJoints,
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but I I was been messing around with it this week, and I've been loving the experience so far. So excited to get into that as well.
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So, yeah, I I don't think we really gotta get into why Bitcoin privacy is too
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is important in in this volatile world where we're seeing,
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you know, people getting deplatform from platform from,
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different,
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accounts and,
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all the turmoil in the world
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between, you know, people in Ukraine and Russia,
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dealing with their governments and the situation there.
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People living just generally under authoritarian regimes and,
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you know, more closely, what what's happened in Canada with the the trucker protest
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and,
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you know, the scrutiny that people have gotten after, you know, making these Bitcoin
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driven donations. So
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let let's kick into
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the difference between,
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CoinJoin and a CoinSwap.
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You know, there's a lot of similarities,
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but very distinct methods of, you know,
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getting, on chain privacy. So anyone wanna give us, like, a good overview of, you know, what a coin join really is, what it consists of?
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Sure. I'll have a go at that. So I think the issue that we're trying to address with both Coin Joins and Coin Swaps is the fundamental issue that
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Bitcoin is nonfungible.
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Right?
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So we wish that we had non we we wish we had nonfungibility
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at a protocol layer. We don't have that. So we have to address that on application layer,
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and both coin joins and coin swaps are attempts to do that.
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They differ in the sense that, with a coin swap, you are effectively swapping out one coin's history for a different coin's history.
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So for example, you may have 2 coins of the same size, and then you're trying to say, well, I'm going to swap my history with yours, for example, Evan. With a coin join,
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what we have is a number of,
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different participants come and they join together
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to basically create what we call, for the most part, an equal output coin join where we have a set of inputs and a set of outputs. And the outputs are all the same size. And if they're all the same size, then it's very difficult to tell where the ownership of funds went after the fact. So particularly, if we have multiple rounds of coin joins, we have this anonymity set which builds over time.
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So we are the so the chief difference between the two is that instead of swapping
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one person's history or one kind of individual's history for a different history,
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what we have is swapping your history for the entire coin join and a nimbit nimbitiset that you are taking part or at least that part that applies to you. And that's the kind of the difference as I see it between the 2.
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Cool.
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Yeah. That's a great overview. So now,
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coin swaps,
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at least in in the case of Mercury Wallet, are being built off of, a state chain. Nick, would you wanna get into,
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you know, what what a state chain is for Sure. So a state chain is it's another Bitcoin layer too. So obviously not as well known as the others like a side chain or
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lightning network, but
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it was an idea that was drafted in a paper written by Ruben Sanson in 2019.
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And it's a way of basically transferring
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your private keys or new TXOs
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off chain.
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And yeah. So we we built the first version of this and
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essentially we swap the coins and we swap the private keys and it's non custodial.
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So the first use case was coin swap.
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Now, it is different than coin join in that, you know, you're essentially swapping history.
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So there are some positives. The positives are is that there's no one chain chain of a coin join. The negatives is that you could end up with a undesirable coin, for example.
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To deal with that issue, we we build a sparse Merkle tree of all the coin swaps. So if you were ever in a situation where you coin swapped with a coin that you don't necessarily wanna have, you could prove that you participated in the coin swap because we've attested to the Bitcoin network. So
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Very interesting. Very interesting. So,
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so as
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a
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what do you say? Like, an orchestrator of the state chain. Right? Yeah. I mean, the way to view a state chain at a high level is, I think someone termed it once, like, virtual open dimes.
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So essentially these open dimes now we can swap them. So long as they've got the same denomination,
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we swap them using a similar protocol to the 0 link, but
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so we don't know who's swapped with who. But as part of our state chain implementation,
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we provide a kind of coordination service, which swaps these kind of virtual open dimes or UTXOs.
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So let's say you got scrutiny,
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for example, from, like,
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you know, state actor, would you guys be able to blacklist,
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UTXO's from participating?
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Well, we do actually have a blacklist with, like many of the joint coin joint
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coordinators,
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because
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if people misbehave, that's a DDoS attack. So if someone was to participate in
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a coin swap and constantly not, you know, let the coin swap complete. Yeah. Like join the round and exit out just to, like, throw off the process so that less coin is getting mixed. So we had to implement that coin swap anyway. But long term, we're looking at making the coin swap more blinded.
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We're looking at integrating with Lightning and
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with Schnorr, we can do more blinding scenarios where blacklisting wouldn't even be possible. And that's our approach.
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Yeah. We could have made it blinded from day 1, but there are a lot of UI challenges. Yeah. But, you know, with certain events that happened this year, we're kind of accelerating that as you can imagine.
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Yeah. Let's get there. That would be nice.
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How about other risk with state chains? Do users have,
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you know, to worry about these state chain orchestrator,
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you know, perhaps running off with their funds? Well, that you know, with every layer 2, there are compromises.
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Indeed.
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So if the state chain entity was to cooperate with a previous owner, in theory, they could steal the funds.
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We've built a load of things to not let that happen. We have a we use an HSM on the back end to delete the free,
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the the private keys, the key shares. But also I think the the biggest
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reason we wouldn't do that is because every time a state coin is created, you have essentially a backup transaction.
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If the state chain entity was to cooperate with a previous owner, you would have evidence that that that would that would have happened. We call it proof of scam. So you can always prove that the,
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you know, that the state chain had misbehaved. And I think that's probably the biggest, weapon we have to say that we're gonna cooperate because you can, you know, cryptographically prove we, you know, stole the funds.
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That's great. And you know who I am. I'm here. Yeah. Yeah. Wouldn't be good.
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So, so, yeah, we touched on blacklisting,
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at least within the context of, you know, state chains.
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Anyone wanna make any comments about what we've seen with some of the other CoinJoin coordinators,
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as of late. I know that's been a point of contention, and, you know, I figured we get some spicy discussion in. Ben, you look you look like you have something to say. Yeah. I I used to work at Wassabi, so it's really sad to see, like, that they, they did do that because,
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like, for one, like, I can understand being, like, we don't want the Bitfinex hack coins going through a coin joint and someone coming and arresting me.
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But for 2, they're not they're, like, they're not even taking that stance or thinking, like, we're gonna use, like they're talking about, like, using Elliptic
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to, like, coin to, like, do chain analysis in every coin that comes in. And, like, that's just awful. Like, so
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that's, like, sad to see and, like, really it kind of shows the, like, benefits of things like joint market where it's like there is this no coordinator.
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No one can stop it. No censorship there. So, like, you know, the corn the having the centralized coordinator is nice because, you know, it creates this
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nice incentives where they can, you know, make money and develop the wallet and do all this stuff, but, you know, also has this obviously, centralization is not the best and we can, you know, censorship comes in. So,
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it's sad to see but
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I think,
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you know, luckily in the in the space, there are other alternatives. It's not the only option
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so we're doing fine, I think. Yeah. So, like, not only do you have the options
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of going to another coordinator
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system entirely like Samurai Whirlpool
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or, you know, getting rid of a coordinator entirely and going to, you know, make or take your protocol sort of, like, join market.
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But, you know, other people can run their own wasabi instances and, you can just choose not to mix with the main,
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company.
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So, yeah, it's not it's not the end of the world. Right? We're
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having this, you know, diverse market of, you know, these privacy providers of sorts come in to provide these services.
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But it is a little, upsetting when people, like, preemptively
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decide to do these things without, you know,
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It's a lie.
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It's a lie?
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It's not the truth.
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So, like, don't look at it like you're preempting back to the point.
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There's a legal side to the story.
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Now we there's field out information
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that legally protect me to work.
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That protects us. We you know, we're in a
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Gotcha. Gotcha. And and, you know, honestly,
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would love to give Wasabi
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a voice. Would have loved to have,
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someone from Wasabi on stage, but,
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unfortunately,
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we couldn't make that happen. So,
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we could move forward unless anyone else has any other comments on that.
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Well, look. I mean, you know,
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the reality is, as far as we know, there are no rules or regulations
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that
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state that one needs to blacklist
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UTXO's
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coming into a centralized
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coin join service. That's
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as far as we know, and that's coming from zk Snacks, the makers of Wasabi themselves. Right? That's what they have said to us. So they're not aware of anything. It's from what they've they've said. We're not aware of it anything.
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Certainly, I'm not.
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So and and just, you know, the the the the difficulty of trying to actually create that regular if you think about what a coordinator does, it takes a number of different inputs and it just organizes them. Right?
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So to try and legally block that kind of activity
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is going to be difficult because how do you avoid that
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blocking a lot of other critical services in this world. Right? You know, I mean, what we're talking about is not something dramatic. There's no custody of funds. You know, there's a lot of things that are not going on on there. We're really just talking about
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taking a few bits of data
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and reorganize us us in them, and that kind of happens on the Internet for a number of different services, often with financial amounts involved. So,
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you know, I don't know. I I think that
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it's it's really not good for the Bitcoin world when we start seeing services trying to
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approach things
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in a way that,
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you know, really highlights the the the fact that we have this non fungible.
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It's a it is a fact that it exists, but we shouldn't be trying, particularly as a privacy service,
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to push that forward. Right? The more that that happens, the worse things get for everyone, And, it's
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really sad to see.
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Okay.
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Moving forward,
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coin joins,
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coin swaps,
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can do do you guys see them as being complimentary,
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supplementary?
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Can they be used in tandem? And if so,
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how would you guys propose they'd be used?
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I think they, they should be used in tandem because, like, if you're gonna do a coin swap, for 1, you're just gonna give someone your coin, and now they could see, like, your whole history.
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So if you don't wanna dox, like, your coin's history to this person you're coin swapping with,
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then you would wanna coin join beforehand to see, like, okay. You don't know I bought this Bitcoin on Cash App or something.
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So, then they would, like, know you'd hide it there as well as, like, have a larger anonymity set going in to protect you because,
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it's a it's like
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a economic or, like, a, you know, a state act would have high incentives to come in and just do coin swaps all day to try to see who's coin swapping. If you come in with
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a CoinJoin,
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output, they would not be able to totally tell. Like, because if you just came from an address you withdraw with from, like, Coinbase, they'd be like, oh, this is, Ben Carman's coin, and then, you know, the coin's office is useless now. So if you came in with a coin join, they'd have much harder time figuring out who it is. So I really do think, like, both of them together just complement each other extremely well.
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Yeah. I agree. I think,
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we're really just scratching the surface, and I'm sure people are, you know, doing their own mixes of stuff. But moving forward, it'd be really cool to see some services,
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sort of combine the 2, take the best properties of each
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and be able to pass it on to the user.
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Nick, you had some ideas about other tools that could be used in conjunction, at least with your project and and coin swaps.
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Yeah, I mean we're looking to make things more blinded and that's like
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essentially work a lot more with lightning.
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So
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rather than to take a fee
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on our state chain, which, you know, certain companies could see the fee and basically
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figure out that our coins had participated in the coins, what we would take a lightning fee up front, issue a kind of like a cholmang token,
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and that would be redeemed for, like, a stake coin, and then that would make it slightly more blinded. And and we've looked at coin joins as well as a kind of on the withdraw process. But I think as always, you know, do you want So from the withdrawal process, you mean like, so going
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pegging out of the Stakecoin? Like Yes. Yeah. Okay. Interesting. But, we put that on on the draw because we're more focused on lightning. But, and people understand
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there's a lot of things you can do, but the UI challenges
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are kind of harder than the technology behind it. Yeah. We I think all technology here uses Tor. That's an unreliable,
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hard network to work with and Getting your start on Tor.
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And getting that working on a UI that, you know, everyone can use is is a challenge, and that's probably why but I think that's improving. So
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So you you mentioned a very interesting thing there, like, a lot of application
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challenges putting together an app to make everything,
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work smoothly at the end of the day for the user. You guys think that more progress can be made at the protocol levels with these sort of things, like coin joints, coin swaps, other similar tools, or you think we need more focus on,
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the UI, UX, the applications that we're giving the users? Like, where is the bigger room for improvement would you say?
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I would say,
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we could really do with cross input signature aggregation.
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It would be
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a major improvement and not just to the privacy layer of Bitcoin, but to the scalability
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as well. Right? Indeed. We have less data going into every transaction. So for me, that is
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a very fundamental
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improvement. And
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I worry that I don't see it being talked about a lot. I think it's been very briefly mentioned here on the stage
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maybe once in the last 2 days,
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and I'm really hoping to see more, being done. I know that it's not a simple thing. I'm I'm very aware of this. It's very complicated.
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You know, it's a great challenge to implement. You know, we people have been thinking about it for many, many years. It's,
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you know, if it was easy to do, it would have been done by now. But, Craig, you wanna give us, like, a little overview of cross input signature
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aggregation, what it means as,
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like, an overview?
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Sure. So,
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basically, right now, every, Bitcoin input that you,
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spend, you have to provide a signature which shows that you own it.
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And so we right now construct a transaction,
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and for every input, we have to provide this. Now that only not only bloats the size of the transaction
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action, but with with Snore, what we can do is actually aggregate them down to 1. And that enables us to not only decrease the size of the transaction, which is good from a scalability
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point of view, but in fact, it can make privacy focused transactions like coin joint transactions
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actually cheaper to make.
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Right? So that's a very important fact. Generally, what we've seen in the history of Bitcoin is that advances happen
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when
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the cost to the user becomes less. Right? Ultimately,
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everything is driven by money. This is a monetary
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net network we're on. And if we're looking for things to actually get adoption, one of the reasons
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Sigrid has adopt opt adoption in this world is because it was cheaper to do.
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So for me, that's a really important thing. It not only will enable Bitcoin to scale better, but it will actually make people turn to privacy focused
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transactions
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sooner than they might otherwise. Yeah. Absolutely. Yeah. Bitcoin,
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by all of its design, it teaches us that the incentives
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are imperative.
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And CSAA, or cross input signature aggregation, not only
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makes it possible for us to, like, turn every
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transaction into a coin join, but it's, like,
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you know, incentivizes that economically, which is the amazing thing. So,
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you'd actually be paying more to not get in on a coin coin join and,
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improve the privacy of yourself and others. So,
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yeah, that would be quite a advancement, and, you know, I I hope,
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you know, it just doesn't go to the wayside and we could find a way to bring it to Bitcoin. That would be incredible.
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Fontaine, haven't heard from you too much. You wanna talk a little bit about,
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fully noted why why you picked
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join market to put in as opposed to perhaps one of these other centralized coordinator?
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Yeah. The whole idea with fully noted is
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you run your own self hosted server, Bitcoin Core,
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and
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join market is exactly it works the same way as fully noted. It's just built right on top of Bitcoin Core. So it was a kind of a perfect match architecturally
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for the app and just kind of
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the mental model of how the app works.
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I'm, yeah, I'm very excited about adding join market. It is
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it's it's very it's mind blowing how it works and kind of the just the cryptography that goes into it to
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prevent civil attacks, I think. You know? It's I think it's the reason I like joint market is because I've just my own intuition tells me it's harder to civil attack joint market than a centralized coordinator,
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especially the ones where it's cheaper to keep, you know, remixing your coins,
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I think.
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So and and, obviously, with what has happened recently
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has shown light that, you know, central centralized servers where you're doing privacy related stuff probably is gonna be a target.
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Right? Yeah. Yeah. Absolutely. We're we're definitely gonna see more scrutiny in the coming years.
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I'm just yeah. I'm happy to that it's approved on the App Store and that it's out there. And I need to write some more tutorials and get some more people teach people how to use it, basically, and get it easier to install JoinMarket, which a lot of the node packages now they have they are running it, but they need to be running the wallet daemon
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and setting up a service for that to easily easily connect. Yeah. So we we've had join market. It's been a project for for some years now. Mhmm. And, you know, most people have had to just interface with it via CLI or, like, very, like, basic web interfaces.
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So I am ecstatic to see all this progress being made in terms of the UI for it. And and it's funny because, you know, you don't don't have the centralized coordinator making fees and facilitating the development of its software. So,
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you don't have, like, a team that's been incentivized to, like, you know, put out a really nice UI like Wasabi or Samurai has.
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So it's really been sort of, you know, up to the community to, you know,
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get together and and put stuff together, hook into the API, and and make something presentable for users. So it's been really awesome to see people like yourself putting out,
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you know, this UI.
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We've seen some efforts from
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from others like the Bitcoin design community, and I know Gigi has been deeply involved in in the the web UI.
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That's that's an outfit. I believe it's on Umbrel now. It it's called Flow. What is it called?
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No. I'm not sure what it's called, but, yeah, they did release it very recently, and it's actually, like, very pretty. So it's good to see.
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Yeah. Yeah. So, it's, like, a great start, and and I'm really excited to see that project iterate.
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And,
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yeah, let's let's see more. I I I know there's some people working on some other mobile
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apps. Like, it would be great if, we could get those Android users on.
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Mhmm. So,
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yeah, that has been an awesome
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awesome, development to see.
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So, yeah, more join market stuff.
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Ben, you wanna get into some stuff with, coin joins and lightning? Let's dive a little into some LN Vortex stuff. Sure. Yeah. Like,
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lightning kinda has this fundamental problem right now where
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when you have a lightning channel, you just to tell people about the channel to prove you're not lying about it, you just say, like, this is my UTX, so my channel is in. So everyone can see, like, you know, this node owns this channel, and then you just look at the opening
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inputs in there and be like, oh, okay. This is his wallet. And, he docks a lot of your on chain privacy here. So what most or if you're privacy minded, what you should be doing is, like, coin joining through, like, something like Wasabi or Whirlpool or join market
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or doing a coin swap with, like, Mercury Wallet or something.
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And then so you have these new coins, and then you open the channel. So when people see that you have,
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c t x o, they don't know your actual hoistory. They can't see, like, oh, you got these coins from Coinbase or something.
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So, but that still is not the best because, you know, you you're not having to do, like, 2 or 3 transactions all on chain and that takes up a lot of space. So,
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I tried to solve this by building vortex, which is basically a way to instead of doing a coin join then opening a channel, you you just open a channel in a coin join with, like, multiple other people. So it is just, you know, you're for 1, saving on chain space, and then 2, like, you know, your lightning node is gonna be online, like, 247, at least it should be. So why not just have this thing coin joining all the time as well,
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very small on chain savings by opening a channel with multiple people.
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So it's not just taking, like, your next pub from another, you know,
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wallet that you have mixed and,
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using that to open up channels. It's like you're doing the coin joint right into the channel open.
395
00:30:45.245 --> 00:31:16.350
Yeah. Precisely. So, it it's really nice because then you just, like, have your channel in there, and if you do it in private channel, then people just don't know, like, what is what this is, which, you know, really benefits you. So so how have you how have you designed it? Like, you got your own coordinator in there that's putting Yeah. Yeah. So it's, the coordinator model because, that's a lot easier to build, sadly. But, so there's a coordinator just, like, you know, make sure everyone's queues up, and then you queue up, and, everyone opens the channel at the same time. So what are your plans for that? Are you gonna run your own coordinator or you just put the software out there?
396
00:31:18.135 --> 00:31:22.075
It might be illegal. I don't know. So maybe someone on will run it, but yeah.
397
00:31:26.570 --> 00:31:35.150
You know, perhaps a NIM can Yeah. Step up to the plate and help us out. Yeah. I I wouldn't wanna see how the blacklist developed.
398
00:31:35.610 --> 00:31:40.424
You know, Johnny will push the pressure on you. So, let's try to steer clear of that. Yeah. Yeah.
399
00:31:40.725 --> 00:31:48.220
No. I I we have talked to some lawyers about it, and, apparently, it's like, don't say CoinJoin. We need to call it collaborative transactions now. And it's just,
400
00:31:49.100 --> 00:31:54.240
this isn't for privacy. It's for cheaper on chain. I'm a businessman. I'm trying to save money. So,
401
00:31:55.304 --> 00:31:56.765
there's actually, like
402
00:31:57.385 --> 00:31:59.565
people seem okay with that now. So yeah.
403
00:32:00.345 --> 00:32:01.164
Cool. And
404
00:32:02.030 --> 00:32:07.170
where would you say the state of the project is right now? It seems very early. Right? But,
405
00:32:08.350 --> 00:32:14.565
it's it's functional. Right? Yeah. I've I've on reg test, I've opened the lightning channel, so it works.
406
00:32:15.424 --> 00:32:19.664
I'm I've been working like, I'm too busy right now with my, like, real job. But
407
00:32:20.880 --> 00:32:25.140
Yeah. Startup life is hard. Yeah. Startup life sucks, but it's also great. But,
408
00:32:25.440 --> 00:32:35.075
I actually talked to, like, a bunch of people here, this week about it, and, I got people few people to commit to actually, like, paying money to try to build a UI for it. So
409
00:32:35.375 --> 00:32:39.890
once I have that out, it'll be very easy to launch. So I I should be launching in the next month or 2.
410
00:32:40.430 --> 00:32:45.730
Yeah. Dope. Maybe we should talk about trying to get that into Zeus. That'd be pretty cool. Very damn.
411
00:32:46.975 --> 00:32:48.755
Yeah. I've been thinking a lot about,
412
00:32:49.215 --> 00:32:50.595
Coin Joins and relationship
413
00:32:51.054 --> 00:32:53.475
to LN and what we can do to,
414
00:32:55.670 --> 00:33:01.670
you know, give users the the interfaces and and the tools to be able to use them in tandem. So,
415
00:33:02.784 --> 00:33:04.404
yeah, I've I've been working on
416
00:33:05.664 --> 00:33:06.404
some external
417
00:33:06.705 --> 00:33:11.365
account imports from XPUBs to pull into Zeus with the LND PSBT API.
418
00:33:12.030 --> 00:33:14.670
And I very much would like to,
419
00:33:15.070 --> 00:33:17.810
you know, get some coordination with some of the coin joint
420
00:33:18.190 --> 00:33:18.690
projects
421
00:33:19.685 --> 00:33:22.665
to provide the ability to do some, you know, external
422
00:33:23.365 --> 00:33:24.985
signing for, like, you know,
423
00:33:25.525 --> 00:33:26.505
you know, unfunded,
424
00:33:27.220 --> 00:33:29.480
unsigned PSBT that Zeus passes it
425
00:33:29.940 --> 00:33:34.440
and going back. So that would save you from having to, like, transfer make a transaction
426
00:33:35.300 --> 00:33:35.800
to,
427
00:33:36.495 --> 00:33:39.315
you know, from your samurai or whirlpool to Zeus.
428
00:33:41.135 --> 00:33:43.475
But, you know, your solution cuts out that
429
00:33:43.850 --> 00:33:49.389
extra step. Like, just go from the coin join right into the Lightning channel, and I find that fascinating.
430
00:33:50.090 --> 00:33:52.750
Yeah. I mean, it's weird because, like, a lot of people, like,
431
00:33:53.289 --> 00:33:55.665
if they wanna open a Lightning, you know, a lot of their, like,
432
00:33:56.045 --> 00:34:00.945
their process is, like, either, like, send from, like, you know, their exchange or their hardware wallet
433
00:34:01.440 --> 00:34:02.820
to, like, you know, Samurai,
434
00:34:03.360 --> 00:34:18.685
mix it, do, like, you know, 2 or 3 on chain transactions, then send it to the LND wallet, then open the channel. So it's like you're wasting all this block space and spending all these fees, and it really sucks. So At least you're propping up the fee market. That's good. Yeah. So, you just do it all in one
435
00:34:19.840 --> 00:34:21.140
nice channel. Yeah.
436
00:34:24.880 --> 00:34:25.380
Great.
437
00:34:26.480 --> 00:34:26.980
So
438
00:34:29.095 --> 00:34:30.555
let's take it back to,
439
00:34:33.015 --> 00:34:35.740
you know, protocol stuff versus application stuff.
440
00:34:36.780 --> 00:34:38.880
Do you guys see any other
441
00:34:39.740 --> 00:34:47.075
things substantially that application develop I mean, we we got into CISA earlier, you know, and we've said that there are a lot of,
442
00:34:47.475 --> 00:34:50.455
enhancements that we can make on protocol layers. But
443
00:34:50.755 --> 00:34:55.700
what more can application developers do to make these tools more accessible?
444
00:34:59.280 --> 00:35:09.965
I mean, there are some things like with addition of Taproot now, we can do some new fancier things that we couldn't before since, like, we do have the raw pubkey on chain now. So you could do things like a ring signature
445
00:35:10.420 --> 00:35:16.040
and other stuff that, you know, you won't block as an on chain. We could do that for, like, proofs inside your coin joint. So,
446
00:35:16.660 --> 00:35:18.760
there's probably now room for a lot more,
447
00:35:19.715 --> 00:35:22.935
different models and, like, 0 link or something to actually create CoinJoints.
448
00:35:24.275 --> 00:35:27.095
I know, like, some people are working on research on that, but,
449
00:35:27.910 --> 00:35:29.690
it would be cool to see someone, like, you
450
00:35:29.990 --> 00:35:42.244
know, now they have Taproom and all these other new properties, let's, like, try to build out things that, like, actually use it and, because that was, like, largely a privacy upgrade and with it, we should be able to, like, create new kind of coin joint protocols
451
00:35:42.865 --> 00:35:45.605
or, at least improve them currently. And,
452
00:35:46.000 --> 00:35:52.960
we haven't really seen that yet because it's only been a couple months, but Yeah. I would love to see that happen. Yeah. We're just starting to kick off,
453
00:35:53.944 --> 00:35:56.365
you know, what Taproot is gonna bring to the table.
454
00:35:56.905 --> 00:35:57.484
You know,
455
00:35:57.944 --> 00:36:07.750
Lightning Labs and and Taro was a pretty big announcement, and it's gonna have a lot of repercussions. But, yeah, I would love to see, you know, more tooling, through, like, Tapscrubs
456
00:36:08.450 --> 00:36:10.470
and really getting creative with that to
457
00:36:10.825 --> 00:36:13.725
bring people better privacy. So that would be exciting.
458
00:36:14.265 --> 00:36:18.445
Yeah. I think the one one thing we should also consider is that,
459
00:36:18.770 --> 00:36:27.750
you know, unless we do away with, which, frankly, without a hard fork, I don't see it happening, this kind of issue of Bitcoin being basically non
460
00:36:28.275 --> 00:36:28.775
fungible
461
00:36:29.315 --> 00:36:32.535
at product layer. Right? If you can see the amounts,
462
00:36:33.155 --> 00:36:36.695
unfortunately, there is a coin history, and you can trace it back over time.
463
00:36:36.995 --> 00:36:37.495
So
464
00:36:37.809 --> 00:36:46.390
unless we can do away with that, we're gonna have to deal with the fact that we have to build something on the application layer. And then, really, you're talking about,
465
00:36:46.714 --> 00:36:48.175
you know, the idea of anonymity
466
00:36:48.954 --> 00:36:51.055
sets. Right? So you you're sort of
467
00:36:51.355 --> 00:36:56.540
one of a number of people, and, obviously, the greater that group of people, the more anonymous you are.
468
00:36:58.300 --> 00:37:08.115
So it's one thing to talk about, you know, how can we have new tools, but we also have existing tools today. And every time you launch a new tool, you're gonna have to possibly
469
00:37:08.575 --> 00:37:10.835
start from 0 on that anonymity
470
00:37:11.454 --> 00:37:14.980
set. Right? So that crowd is gonna start off with 1. It's gonna go to
471
00:37:15.360 --> 00:37:29.095
234, and it takes time. It, you know, it takes time for that tool to get out there. It takes time for people to trust trust the the tool for clients to be written at how many wallets are going to adopt the same tool or what is everyone going to have to use one wallet?
472
00:37:29.500 --> 00:37:30.320
So, you know,
473
00:37:30.780 --> 00:37:32.080
I think it's dangerous
474
00:37:32.460 --> 00:37:36.355
to constantly be looking into the future and saying, well, what could happen? Right?
475
00:37:36.915 --> 00:37:39.734
Because we might end up in a place where
476
00:37:40.435 --> 00:37:42.935
if we don't push the tools that we have today,
477
00:37:43.395 --> 00:37:47.500
then by the time we get to the tools that we think might be better,
478
00:37:47.880 --> 00:37:54.620
the world has changed to the point that those tools are seen as not good. Right? But if we use the tools that we have today,
479
00:37:54.924 --> 00:38:01.184
it changes the mindset of people, and it changes how society views it. So if CoinJoin becomes,
480
00:38:01.565 --> 00:38:04.065
you know, a widely used thing today,
481
00:38:04.400 --> 00:38:20.674
then that will change the way that society views it. And I think it's important not to wait too long to actually use the tools because as I was saying, the crowd grows. And as the the crowd grows, which not only helps the anonymity of your coins, but it also changes the way that the rules and regulations
482
00:38:21.214 --> 00:38:22.515
of the world will form.
483
00:38:22.920 --> 00:38:25.579
So, you know, I think there's a different way to see it.
484
00:38:26.040 --> 00:38:34.465
And it's, like, very true to, like, we really aren't using all the tools we have available today. Like, we won we're talking about Taproot, but, like, liquid has existed for years and has,
485
00:38:35.005 --> 00:38:46.830
confidential transactions, which is, like, perfect for coin joints where you could have unequal amounts and, like, do all these spends, you know, it is, you know, slightly different trade offs with it being the, side chain and kinda custodial.
486
00:38:47.290 --> 00:38:47.450
But,
487
00:38:48.155 --> 00:38:59.440
it would be perfect as a privacy tool and, like, no one is using that as as build something, which is like, that would be, like, amazing. I would use that all the time if someone built where you could coin join on there and do all these unequal amount, things,
488
00:38:59.819 --> 00:39:00.559
and then,
489
00:39:01.180 --> 00:39:08.645
atomic swap back into real Bitcoin. Like, and, you know, no one's built that in, like, 4 or 5 years, and, like, we really aren't using our tools yet. And,
490
00:39:09.205 --> 00:39:15.950
like, yeah, that's something we need to press on. I think we also need funding. Like, there's a lot of there's not much money in developing wallets,
491
00:39:16.250 --> 00:39:18.269
especially self sovereign wallets.
492
00:39:18.895 --> 00:39:19.555
You know?
493
00:39:20.975 --> 00:39:21.795
So yeah.
494
00:39:22.255 --> 00:39:24.195
Yeah. It's it's very few players,
495
00:39:24.655 --> 00:39:25.955
you know, helping facilitate
496
00:39:26.415 --> 00:39:28.035
the building of these things, but,
497
00:39:28.600 --> 00:39:34.940
you know, we got some good actors that we're extremely grateful for. Like, HRF. HRF both through us
498
00:39:35.724 --> 00:39:37.984
a Bitcoin each at about the same time.
499
00:39:38.365 --> 00:39:38.865
And,
500
00:39:39.405 --> 00:39:45.010
yeah, it's really awesome that we've been able to use those sets wisely and continue to build out our prod
501
00:39:45.490 --> 00:39:51.750
products. So, you know, shouts to HRF and Alex Gladstein, all the good folks over there for for supporting us.
502
00:39:52.370 --> 00:39:55.275
So that's great. But, yeah, we hit on a lot of great points right there.
503
00:39:56.694 --> 00:39:59.115
I think it's very important to hit on, you know,
504
00:40:00.190 --> 00:40:01.810
perfect being the enemy of good
505
00:40:02.110 --> 00:40:04.050
and, you know, people holding out to,
506
00:40:04.990 --> 00:40:07.250
you know, for privacy tools that may
507
00:40:07.654 --> 00:40:09.994
you know, better properties or whatever or whatnot.
508
00:40:11.414 --> 00:40:16.875
But you know, that that's like speaking from a position of privilege. There are a lot of people that need
509
00:40:17.300 --> 00:40:18.200
Bitcoin privacy
510
00:40:18.500 --> 00:40:19.000
today.
511
00:40:19.780 --> 00:40:22.120
And, you know, how do we support those people?
512
00:40:23.620 --> 00:40:24.360
I think
513
00:40:24.980 --> 00:40:26.200
by and large, like,
514
00:40:26.685 --> 00:40:33.265
the best way is to get in on these mixes with people, use the tools, and help increase those anon sets.
515
00:40:33.805 --> 00:40:34.305
And,
516
00:40:35.920 --> 00:40:40.020
you know, we saw it even with the the construction of this panel,
517
00:40:40.560 --> 00:40:41.060
that,
518
00:40:41.440 --> 00:40:42.500
you know, CoinJoin,
519
00:40:42.800 --> 00:40:43.300
CoinSwaps,
520
00:40:44.075 --> 00:40:46.175
privacy in general on Bitcoin
521
00:40:46.795 --> 00:40:48.015
has a bit of a stigma.
522
00:40:49.275 --> 00:40:49.775
People,
523
00:40:51.035 --> 00:40:55.270
or some companies in the space don't want to touch it with a 10 foot pole,
524
00:40:55.570 --> 00:40:57.190
and and that's really unfortunate.
525
00:40:58.369 --> 00:40:59.910
But what can we do
526
00:41:00.290 --> 00:41:01.430
to try to destigmatize
527
00:41:03.535 --> 00:41:04.915
Bitcoin privacy, which
528
00:41:05.375 --> 00:41:06.835
is is a human right?
529
00:41:08.095 --> 00:41:14.210
I think the the most important thing is to use the tools. Right? That is the the number one thing. We we have to,
530
00:41:14.829 --> 00:41:18.450
not only use the tools, but encourage others to use them, explain them.
531
00:41:18.750 --> 00:41:19.245
And,
532
00:41:19.725 --> 00:41:30.210
you know, I I have, like, a a thing I like to say, like, normalized CoinJoin, you know, or coin CoinSoft. They're not normal normalize these things because they they they they really like
533
00:41:30.990 --> 00:41:34.850
privacy. If you believe it's a basic human right, then Indeed. You know,
534
00:41:35.230 --> 00:41:36.930
why should we feel ashamed
535
00:41:37.475 --> 00:41:42.215
to just aim aim for that? Because that's all that a CoinJoin is doing. It's just giving you financial
536
00:41:42.515 --> 00:41:43.015
privacy
537
00:41:43.555 --> 00:41:44.455
over your coins.
538
00:41:45.075 --> 00:41:47.720
So, you know, the the sort of
539
00:41:48.340 --> 00:41:52.520
worries and we sort of laugh at each other and smile and say, well, maybe it's illegal.
540
00:41:53.220 --> 00:41:57.795
But actually, we need to take the the kind of, in my view, the firm view that it's not. Right?
541
00:41:58.575 --> 00:42:00.835
I think that we shouldn't kind of,
542
00:42:02.015 --> 00:42:05.530
have this kind of half view. We should actually be brave and say, you know what?
543
00:42:06.230 --> 00:42:08.970
What we're asking for here is not something which is,
544
00:42:09.830 --> 00:42:11.290
you know, in some way
545
00:42:11.685 --> 00:42:12.905
strange or,
546
00:42:13.765 --> 00:42:15.145
you know, not kosher.
547
00:42:15.525 --> 00:42:18.825
It's really just a normal thing that we should all want.
548
00:42:26.109 --> 00:42:28.425
Yeah. And, you know, it it's people have
549
00:42:28.805 --> 00:42:34.185
this misconception based on, you know, I guess, Bitcoin's history, darknet markets that,
550
00:42:34.700 --> 00:42:40.080
you know, why would you want privacy? Are you trying to buy drugs? Are you trying to support terrorism?
551
00:42:41.020 --> 00:42:41.520
And
552
00:42:41.820 --> 00:42:42.460
it's it's
553
00:42:43.505 --> 00:42:46.405
that that couldn't be, you know, further from the truth. It's like
554
00:42:46.705 --> 00:42:48.645
when you make a purchase, right,
555
00:42:49.105 --> 00:42:54.220
like, do you want the person that you pay to know how much money you have and to follow you
556
00:42:54.520 --> 00:42:55.820
to every other store
557
00:42:56.360 --> 00:42:57.900
that you go to? No.
558
00:42:58.440 --> 00:42:59.500
No. That sucks.
559
00:43:00.665 --> 00:43:03.085
That's garbage. Do you want your employer
560
00:43:03.865 --> 00:43:04.525
to know
561
00:43:05.145 --> 00:43:06.765
what you do with your money
562
00:43:08.740 --> 00:43:11.960
after every paycheck. No. Never. Hell no.
563
00:43:13.380 --> 00:43:15.480
So all purchases need to be frightened.
564
00:43:16.505 --> 00:43:19.885
Indeed, whether it be, you know, something as simple
565
00:43:20.744 --> 00:43:23.724
as getting, you know, medicine for you or your family
566
00:43:24.105 --> 00:43:26.750
or, you know, making other sensitive transactions
567
00:43:27.050 --> 00:43:30.750
that, you know, other people shouldn't, you know,
568
00:43:31.850 --> 00:43:32.590
know, like,
569
00:43:32.970 --> 00:43:34.270
these tools are imperative,
570
00:43:35.905 --> 00:43:37.845
you know, especially in a world
571
00:43:38.305 --> 00:43:42.005
where, you know, there's this increasing push by the state to
572
00:43:42.730 --> 00:43:48.109
by not just the state, I suppose, but also corporations to know as much information about your life
573
00:43:48.410 --> 00:43:50.190
and your finances. 1st and foremost,
574
00:43:50.945 --> 00:43:54.805
it's important that, you know, we don't just try to we don't just recreate
575
00:43:55.105 --> 00:43:56.485
these tools in this,
576
00:43:56.865 --> 00:43:58.085
you know, open blockchain
577
00:43:58.385 --> 00:44:01.570
system and that we give users the ability,
578
00:44:02.750 --> 00:44:07.810
to take back some of that privacy and only selectively reveal the information that they want to reveal.
579
00:44:08.535 --> 00:44:09.355
So It's,
580
00:44:10.215 --> 00:44:18.170
it's weird because, like, I can understand if you're, like, I don't care if Twitter sends me targeted ads because, you know, I'll buy Tide Pods or whatever.
581
00:44:18.470 --> 00:44:33.365
But your Bitcoin privacy is extremely important because, like, for 1, it's stored like, the history is there forever. So even if you fuck it up, it's gonna be fucked. Yeah. Yeah. Like, that's there's no getting the toothpaste back in the tube if you make an error with your on chain,
582
00:44:33.765 --> 00:44:34.265
interactions.
583
00:44:34.565 --> 00:44:35.065
So
584
00:44:37.590 --> 00:44:40.170
you gotta make sure you're doing it right from the get go.
585
00:44:40.630 --> 00:44:44.570
But even then, there's still a lot of challenges, like your anon set deteriorating
586
00:44:44.950 --> 00:44:45.255
over
587
00:44:45.815 --> 00:44:49.994
time. You know, perhaps some people that are in your mixes, they'd begin to
588
00:44:50.375 --> 00:44:54.315
KYC themselves as they're trying to sell Bitcoins perhaps through,
589
00:44:54.770 --> 00:44:58.310
you know, some of these exchanges? Don't do that, guys. Don't do that.
590
00:45:01.330 --> 00:45:03.510
Yeah. It's it's a can of worms, really.
591
00:45:04.165 --> 00:45:07.385
So, you know, what what else can can people do?
592
00:45:07.845 --> 00:45:08.345
Education
593
00:45:08.645 --> 00:45:09.845
too. I think,
594
00:45:10.405 --> 00:45:12.750
OpenNoms is really great. He's just constantly helping people out and
595
00:45:15.150 --> 00:45:16.290
excellent resources.
596
00:45:17.070 --> 00:45:17.730
If you
597
00:45:18.110 --> 00:45:21.410
highly suggest looking at his GitHub and going through all his information.
598
00:45:23.055 --> 00:45:27.615
Indeed. Indeed. Just put us through quick And I think what goes along along with that is, you know, any,
599
00:45:28.815 --> 00:45:30.515
service that that blocks,
600
00:45:30.960 --> 00:45:40.545
you know, coin joined funds, you know, take them off. You know, don't be afraid to call them out because, effectively, we have 2 forces pulling in the world. Right? We've got the sort of
601
00:45:41.265 --> 00:45:44.005
call them governmental forces that are pulling us towards
602
00:45:44.785 --> 00:45:54.680
the regulation, the KYC side. We need something on the other side, and that has to be us. Right? Who else is it going to be? Who else is gonna stand up? If not us, then who? Exactly.
603
00:46:01.395 --> 00:46:04.455
Yeah. It's you know, I said earlier that,
604
00:46:05.315 --> 00:46:07.560
you know, privacy is a human right, but
605
00:46:08.280 --> 00:46:11.820
rights are not granted. They're taken. And it's gonna take
606
00:46:12.680 --> 00:46:13.900
a lot of,
607
00:46:14.440 --> 00:46:18.205
you know, push from us or or pulling if we're
608
00:46:18.744 --> 00:46:19.965
using the pulling analogy,
609
00:46:21.065 --> 00:46:24.920
to to pull things in the direction we want to see them. So that's gonna take
610
00:46:25.240 --> 00:46:34.265
individuals stepping up. That's gonna take developers and and projects stepping up. That's gonna take companies stepping up and saying, no. This is the right thing for us,
611
00:46:35.605 --> 00:46:37.545
for for our users, our customers,
612
00:46:38.164 --> 00:46:40.345
and and for humanity as a whole.
613
00:46:40.750 --> 00:46:41.250
Because
614
00:46:41.950 --> 00:46:44.690
the alternative that we could, you know,
615
00:46:45.070 --> 00:46:45.810
very rapidly
616
00:46:46.430 --> 00:46:47.810
decline into is,
617
00:46:48.365 --> 00:46:49.005
you know, a,
618
00:46:49.885 --> 00:46:50.385
totalitarian
619
00:46:50.685 --> 00:46:51.985
hellscape of sorts
620
00:46:52.525 --> 00:46:53.025
where
621
00:46:53.805 --> 00:46:56.865
every transaction is recorded and known about
622
00:46:57.430 --> 00:46:57.930
from,
623
00:46:58.390 --> 00:46:59.530
you know, your personal
624
00:46:59.830 --> 00:47:06.235
transactions at the pharmacy or regarding to your health to the pocket change that you give to your son.
625
00:47:07.995 --> 00:47:16.720
Do you really wanna live in a world where you have to get permission from the government or or, you know, tell them about spending money you give to your kids.
626
00:47:17.180 --> 00:47:18.400
I sure as hell don't.
627
00:47:20.495 --> 00:47:24.595
So, yeah, we're coming up on time soon. We've got about 2 minutes to wrap up.
628
00:47:25.295 --> 00:47:27.235
Do you guys have any closing thoughts?
629
00:47:30.109 --> 00:47:31.410
Thank you for having me.
630
00:47:32.589 --> 00:47:34.369
Thanks for being here, and thanks for
631
00:47:34.829 --> 00:47:36.369
building some awesome tools.
632
00:47:38.005 --> 00:47:44.185
Yeah. I would just say if you don't coinjoin, it's not or coin swap. You should try them out. It's, like, actually very easy to do,
633
00:47:44.485 --> 00:47:56.444
and it's monumentally beneficial for you. So, like, I know a lot of people are daunted. It's like, oh, that's the nerdy Bitcoin people that it's like that's what the hardcore people do. It's like, no. It's, like, I could get my mom to use, like,
634
00:47:56.744 --> 00:48:01.085
any of them. They're they're not that hard. So you should try it out if you haven't done it before.
635
00:48:01.385 --> 00:48:02.204
Yeah. Absolutely.
636
00:48:02.710 --> 00:48:05.289
Get on your Umbrella, downloads, join market,
637
00:48:05.589 --> 00:48:10.069
check out Mercury Wallet. I've been having a great time planning with with it this week, and,
638
00:48:10.905 --> 00:48:13.325
it's just super easy to use. Just deposit,
639
00:48:13.625 --> 00:48:14.445
auto swap.
640
00:48:14.905 --> 00:48:17.645
I'm just running around and increasing my in onset.
641
00:48:18.740 --> 00:48:23.480
Yeah. It's it's great to have, you know, users that test it. I mean, when we went into alpha,
642
00:48:24.020 --> 00:48:36.210
some guy decided to create the state chain torch, and we learned so much in those 3 months. You know, it was passing around on Twitter. People were finding bugs all over the place, and that really helped harden the product and get it to where we could be production ready.
643
00:48:36.750 --> 00:48:43.090
Yeah. It's important to test and try these tools and figure out, you know, where the bugs are, the rough spots. And,
644
00:48:44.110 --> 00:48:51.255
yeah. Yeah, I encourage everyone to go out and run your coin joints, try some coin swaps out, and to keep using these tools
645
00:48:51.714 --> 00:48:53.255
to help proliferate them
646
00:48:53.690 --> 00:48:57.630
and, you know, make privacy better for yourself, but also for others.
647
00:48:58.329 --> 00:49:02.670
And if we can get some more clients as well, you know, the more wallets that implement these tools
648
00:49:03.405 --> 00:49:06.785
would would be great. You know, you might think that I I sort of enjoy being,
649
00:49:07.165 --> 00:49:11.905
you know, one of only 2 world multiple clients, but, really, I wish there were 5. I wish there were there were 10.
650
00:49:12.580 --> 00:49:21.800
For me, that that that would be great. It not not only derisks the entire space, but it just makes it much more accessible to everyone because everyone comes in with different tools. Right? So,
651
00:49:22.315 --> 00:49:28.015
if there are any devs in the or do or do the audience here really think think about building this stuff in because
652
00:49:28.395 --> 00:49:43.825
it's not like we have forever to do it. Right? Time is critical. This is a Yeah. Very much an unsolved area of Bitcoin today. And the more people that are working on it, the faster or the more chance we have of getting to a a place where I think we all want to be.
653
00:49:44.605 --> 00:49:50.450
Indeed. So if you're an application developer out there, please think critically about your users' privacy and,
654
00:49:51.230 --> 00:49:55.250
you know, consider implementing one of these tools into your wallet.
655
00:49:56.515 --> 00:50:01.575
And, Yeah. On that note, let's call it. Thank you all for joining me today. You've been a great discussion.
656
00:50:10.150 --> 00:50:13.450
Good morning, Miami. Welcome to the developer
657
00:50:14.265 --> 00:50:17.244
Bitcoin developer funding panel, open source funding.
658
00:50:18.825 --> 00:50:24.320
My name is Mike Schmidt. We have a great panel here. My esteemed colleagues, we have Adi Shankara
659
00:50:25.180 --> 00:50:28.240
from Summer of Bitcoin, Ben Price from OpenSats,
660
00:50:28.540 --> 00:50:29.040
and
661
00:50:29.420 --> 00:50:32.720
The Bitcoin Company, and Connor Okus from Spiral.
662
00:50:33.825 --> 00:50:38.005
Before we get started, I I don't know if Matt is out there, but I just wanted to
663
00:50:38.464 --> 00:50:42.560
get a round of applause for Matt Odell in putting this together, this open source
664
00:50:45.520 --> 00:50:45.840
stage.
665
00:50:46.640 --> 00:50:47.780
So some quick introductions.
666
00:50:48.640 --> 00:50:52.565
Mike Schmidt, I head up Brink. We are a 501c3
667
00:50:52.945 --> 00:50:56.085
not for profit organization who's focused on funding
668
00:50:56.385 --> 00:50:59.685
developers that are working on bitcoin protocol, bitcoin core,
669
00:51:00.180 --> 00:51:01.640
and, Lightning Technology.
670
00:51:02.420 --> 00:51:07.480
We are currently funding 12 developers that are working on that technology right now.
671
00:51:07.860 --> 00:51:08.360
And
672
00:51:08.660 --> 00:51:09.160
they're
673
00:51:09.875 --> 00:51:14.615
in the form of grants as well as, our mentorship program for young younger developers.
674
00:51:15.235 --> 00:51:20.780
And we have an office in London where some of them are congregating and trying to build that out as a bit of a hub.
675
00:51:21.320 --> 00:51:24.860
And we also publish the, Bitcoin OPTECH newsletter,
676
00:51:25.160 --> 00:51:27.820
and you should subscribe if you haven't already.
677
00:51:28.965 --> 00:51:33.385
So, Connor, do you wanna do Yeah. Sure. So my name's Connor. I work at Spiral.
678
00:51:34.085 --> 00:51:39.440
Spiral is an an initiative within Block, formerly Square, and we're focused on,
679
00:51:40.060 --> 00:51:44.480
improving the open source Bitcoin ecosystem through a number of different initiatives.
680
00:51:45.125 --> 00:51:48.665
One of those initiatives is our grant program where we fund over,
681
00:51:49.365 --> 00:51:54.900
at this point, 2 2 dozen or so developers and designers and some project managers as well,
682
00:51:55.359 --> 00:51:56.180
all working on
683
00:51:56.560 --> 00:52:06.535
various types of Bitcoin projects from, like, Bitcoin Core itself to lightning infrastructure projects to SDKs that make building on top of Bitcoin a lot easier.
684
00:52:07.154 --> 00:52:07.555
And,
685
00:52:08.540 --> 00:52:18.160
we have a global footprint as well, so our grantees are from all over the world, from from India to Australia to to Southeast Asia, America,
686
00:52:18.605 --> 00:52:25.505
Europe, and more. And we want to kinda continue that trend and support developers from other parts of the world as well.
687
00:52:27.119 --> 00:52:27.619
And
688
00:52:28.080 --> 00:52:32.339
just a just a quick shout out to some other organizations who also fund
689
00:52:32.640 --> 00:52:34.180
open source Bitcoin development,
690
00:52:34.480 --> 00:52:41.785
the likes of of, like, Micah at Brink, and, what Ben is doing at Open Sats, and some other organizations like Gemini, Kraken,
691
00:52:42.325 --> 00:52:42.825
Coinbase,
692
00:52:43.500 --> 00:52:47.020
bit bitmex, all all support an an open source,
693
00:52:47.420 --> 00:52:52.059
funding, and it really is a a community effort. And it's really good to see,
694
00:52:52.825 --> 00:53:02.640
you know, funding for for for development moving in in a positive direction, really. So, like, I'm really I'm really happy personally to to to continue to see that.
695
00:53:04.319 --> 00:53:04.819
Ben?
696
00:53:05.760 --> 00:53:06.420
Hey, everybody.
697
00:53:06.720 --> 00:53:08.900
My name's Ben Price. I
698
00:53:09.680 --> 00:53:11.539
actually have a for profit,
699
00:53:12.055 --> 00:53:13.515
and we started a nonprofit.
700
00:53:15.015 --> 00:53:21.595
The for profit's called the Bitcoin company. It's kind of starting as rewards and loyalty company and moving towards kind of a full stack bank.
701
00:53:22.280 --> 00:53:30.780
That's the way we think that we can kind of bring Bitcoin to the most people or consumers in the world. And then what we're here to talk about or what I'm here to talk about today is OpenSats,
702
00:53:31.535 --> 00:53:33.395
which recently launched, which is really exciting.
703
00:53:34.175 --> 00:53:35.155
That is a 501c3
704
00:53:36.335 --> 00:53:37.235
not for profit,
705
00:53:38.015 --> 00:53:42.329
with a mission of supporting contributors to free and open source software,
706
00:53:42.630 --> 00:53:44.010
specifically around Bitcoin.
707
00:53:45.190 --> 00:53:49.675
It's a the board is full of a bunch of Bitcoiners. We're definitely staying focused there. But technically
708
00:53:50.135 --> 00:53:53.675
speaking, it's all free and open source software. Anything that helps Bitcoin flourish,
709
00:53:54.215 --> 00:53:57.035
needs a lot of, I guess there's a lot of, like, technical,
710
00:53:57.890 --> 00:53:58.790
technical dependencies,
711
00:53:59.650 --> 00:54:04.950
that that can help Bitcoin succeed. So we're we're looking forward to funding all of those. And,
712
00:54:05.515 --> 00:54:13.295
you know, shout out to the I think I think the developers get a lot of love here, but there's a lot of, ways to to contribute back to open source, including
713
00:54:13.810 --> 00:54:15.670
design, code review, research,
714
00:54:16.850 --> 00:54:18.150
just general education.
715
00:54:18.610 --> 00:54:23.894
So we're really, looking forward to supporting kind of anyone contributing back, not just developers.
716
00:54:24.914 --> 00:54:25.414
Adi?
717
00:54:26.115 --> 00:54:32.750
I'm Adi. I'm the founder and lead at Summer of Bitcoin where, together with an incredible group of open source developers,
718
00:54:33.450 --> 00:54:33.950
designers,
719
00:54:34.330 --> 00:54:35.550
and sponsor organizations,
720
00:54:35.850 --> 00:54:41.605
we are helping university students learn about Bitcoin and contribute to open source Bitcoin projects.
721
00:54:42.305 --> 00:54:49.750
One of our flagship programs is where a university student contributes to an open source Bitcoin project under the guidance of a mentor,
722
00:54:50.130 --> 00:54:52.230
and, is paid a stipend in BTC.
723
00:54:52.690 --> 00:54:56.470
A number of our graduates have gone on to contribute to Bitcoin core
724
00:54:56.815 --> 00:55:00.355
or joint organizations like Chaincode Labs, Galloway,
725
00:55:00.734 --> 00:55:01.234
and.
726
00:55:03.454 --> 00:55:05.075
So I'd like I'd like to frame
727
00:55:05.500 --> 00:55:06.240
the discussion
728
00:55:06.700 --> 00:55:10.160
with, a story that I think is is interesting. I
729
00:55:10.859 --> 00:55:11.599
was at
730
00:55:12.140 --> 00:55:18.595
a Bitcoin related event, and I ended up talking to an engineer from an unnamed altcoin.
731
00:55:19.375 --> 00:55:23.235
And we were discussing funding, and it and it so happens that he was involved
732
00:55:23.880 --> 00:55:26.700
with a project that happened to raise some funds.
733
00:55:27.480 --> 00:55:28.700
And their
734
00:55:29.160 --> 00:55:32.620
token scheme, however it were, ended up netting them
735
00:55:32.945 --> 00:55:33.445
$300,000,000,
736
00:55:35.185 --> 00:55:35.845
of which
737
00:55:36.545 --> 00:55:39.045
that's not all developer funding, but
738
00:55:39.745 --> 00:55:41.125
a lot of that would go towards
739
00:55:42.060 --> 00:55:45.280
developers and building the protocol and surrounding libraries.
740
00:55:46.300 --> 00:55:46.800
And,
741
00:55:48.380 --> 00:55:57.984
I I hadn't even heard of this particular they're not even in the top 40 and if if you if you believe in the the market cap metric. So you have a non top 40 network
742
00:55:58.525 --> 00:55:59.345
raising $300,000,000
743
00:56:00.684 --> 00:56:01.184
and
744
00:56:02.700 --> 00:56:04.400
we we don't have that sort
745
00:56:05.260 --> 00:56:06.720
of scheme in Bitcoin.
746
00:56:07.420 --> 00:56:08.240
I would say
747
00:56:08.785 --> 00:56:14.965
Bitcoin is a little bit more bottom up as opposed to some of these organizations that are top down. Mhmm. And
748
00:56:15.640 --> 00:56:22.619
the folks here on stage are part of that bottom up ground effort. And so so, Connor, to you,
749
00:56:23.425 --> 00:56:25.765
how do you guys at Spiral think about
750
00:56:26.145 --> 00:56:36.380
the prioritizing open source? Like, why put your energies there? Why is why is Spiral putting their energy there? Why is Jack getting behind it? Maybe you can talk about a little bit of the the motivation there.
751
00:56:36.920 --> 00:56:37.420
Yeah.
752
00:56:38.200 --> 00:56:39.340
So, I mean,
753
00:56:40.585 --> 00:56:41.325
open source
754
00:56:41.785 --> 00:56:45.245
software in general open source development in general is, like,
755
00:56:45.705 --> 00:56:48.365
very synonymous with, like, public collaboration,
756
00:56:49.870 --> 00:56:50.770
self organizing
757
00:56:51.230 --> 00:56:51.730
community.
758
00:56:52.270 --> 00:56:54.210
All of the source code is open,
759
00:56:54.830 --> 00:56:57.090
available for anyone to kind of download,
760
00:56:57.845 --> 00:56:58.984
use, modify,
761
00:56:59.365 --> 00:57:00.505
contribute to,
762
00:57:01.204 --> 00:57:03.065
and and create projects and,
763
00:57:03.684 --> 00:57:06.984
third party projects as they kind of kind of see fit.
764
00:57:07.660 --> 00:57:09.599
And I think at Square,
765
00:57:10.380 --> 00:57:14.160
Square is obviously an org a Square or Block as a as a organization
766
00:57:14.700 --> 00:57:15.359
that has
767
00:57:16.165 --> 00:57:18.985
leveraged a lot of open source tools. And,
768
00:57:20.005 --> 00:57:24.825
Jack, it's no secret that, you know, Jack is a a big advocate of Bitcoin and
769
00:57:25.310 --> 00:57:29.250
Bitcoin being very much in alignment with blocks
770
00:57:29.550 --> 00:57:30.290
and squares
771
00:57:32.244 --> 00:57:35.384
policy and agenda of economic empowerment empowerment.
772
00:57:36.164 --> 00:57:49.675
It was, very much a sense of, like, what is the best way we can contribute back to the open source ecosystem? Because like Mike just described, there is no rule model behind it. Like, a lot of these large organizations
773
00:57:49.975 --> 00:57:55.150
are using tools which we might consider, like, public goods in the in the physical world, and
774
00:57:55.630 --> 00:57:58.450
governments have very much taken on the responsibility
775
00:57:59.069 --> 00:57:59.569
of
776
00:57:59.869 --> 00:58:04.690
providing those services, whether it be, you know, the street lights, the roads, the bridges,
777
00:58:05.535 --> 00:58:07.955
military, for example, and we fund that for our taxes.
778
00:58:08.415 --> 00:58:15.120
But, I'm pretty sure everyone in this room wouldn't exactly want open source and software to be provided by their government. So
779
00:58:17.040 --> 00:58:21.300
we're we're a we're a team. We're we're an initiative that's, like, focused on
780
00:58:21.600 --> 00:58:24.580
providing funding for for open source developers,
781
00:58:25.045 --> 00:58:31.145
designers who are ultimately trying to push the Bitcoin ecosystem forward in a number of different ways, whether it be privacy,
782
00:58:32.099 --> 00:58:32.599
scalability,
783
00:58:33.460 --> 00:58:33.960
decentralization,
784
00:58:34.260 --> 00:58:40.445
developer experience, whatever it is, and just providing the support for them to kind of make those projects,
785
00:58:40.825 --> 00:58:43.885
a reality and sustainable over the over the long term.
786
00:58:44.825 --> 00:58:48.045
You you talk about supporting these projects or or individuals
787
00:58:48.345 --> 00:58:48.845
that
788
00:58:49.609 --> 00:58:52.010
at Brink, we we sort of think of this,
789
00:58:52.810 --> 00:58:54.589
sort of like a funnel. There's there's
790
00:58:54.970 --> 00:58:58.910
and there's this developer funnel for specifically for, let's say, Bitcoin
791
00:58:59.595 --> 00:59:00.095
contributing,
792
00:59:00.715 --> 00:59:05.215
and you have people who have a programming background who maybe start watching some videos,
793
00:59:06.395 --> 00:59:07.215
maybe they
794
00:59:07.560 --> 00:59:15.500
attend summer Bitcoin program. Maybe they attend chain code residency or Jimmy Song's course, and you they kind of work their way through
795
00:59:15.825 --> 00:59:27.040
sort of leveling up their their expertise in order to get to a point where you could be funded by somebody like a spiral, and I'm sure there's similar funnels for non Bitcoin core contributing.
796
00:59:28.300 --> 00:59:28.800
But
797
00:59:29.260 --> 00:59:34.535
how do you get people interested? You know, Adi, you you guys are focused on university students
798
00:59:34.915 --> 00:59:37.655
in terms of that funnel that I sort of outlined.
799
00:59:38.035 --> 00:59:39.735
Why focus on that demographic?
800
00:59:40.350 --> 00:59:40.850
Sure.
801
00:59:41.470 --> 00:59:46.690
You know, that's really an important question and, is at the heart of what summer of Bitcoin is all about.
802
00:59:47.390 --> 00:59:51.385
If you look at the common trajectory of a university student today,
803
00:59:52.245 --> 00:59:58.900
you know, in 1st year of their colleges, especially someone who's studying computer science and training to become a software developer.
804
00:59:59.280 --> 01:00:02.500
In in their 1st year of college, they pick up a programming language.
805
01:00:03.120 --> 01:00:11.674
By 2nd year, they're solving obscure programming puzzles online to get that internship at Google or Facebook by 3rd year. And by the time they graduate,
806
01:00:12.535 --> 01:00:26.305
the biggest aspiration is to have an assortment of big tech AI jobs in their kitty. And so they end up joining one of these big tech companies where they're delegated to a team that know, is maybe resizing buttons or changing fonts every few months.
807
01:00:26.925 --> 01:00:31.825
But, of course, you know, if you're lucky, you get to join a team that harnesses people's personal data,
808
01:00:32.530 --> 01:00:37.190
while those same people feel insecure about their lives as they compare themselves to others.
809
01:00:38.370 --> 01:00:40.655
And then maybe make them feel a bit better by
810
01:00:41.215 --> 01:00:44.355
showing them ads to buy stuff that they never needed in the 1st place.
811
01:00:44.815 --> 01:00:55.630
That's the norm. The exception is, of course, if you didn't do well in programming puzzles, then you know, you compensate by telling your friends that, you're too adventurous for big tech and that you're joining a Fintech startup,
812
01:00:56.010 --> 01:01:03.405
where again, the most that you do is pry on people's private transactions and, you know, in the hope of selling them dirty credit.
813
01:01:05.145 --> 01:01:07.244
What is really not well understood is
814
01:01:07.660 --> 01:01:10.880
that joining Big Tech today is like joining Big Cola.
815
01:01:11.500 --> 01:01:15.760
Both their business models revolve around triggering the same molecule in your brain.
816
01:01:16.095 --> 01:01:18.275
And even if you keep the moral case aside,
817
01:01:18.655 --> 01:01:19.955
on the innovation front,
818
01:01:20.494 --> 01:01:30.300
you know, you can argue that, the sugar water we're drinking today is the same that it was 20 years ago. And, the search engine we use today is the same that it was 20 years ago.
819
01:01:30.895 --> 01:01:32.015
At Summer of Bitcoin,
820
01:01:32.974 --> 01:01:33.714
our message
821
01:01:34.095 --> 01:01:41.150
is, if you are in university and you're a budding technologist, you want to work on frontier technologies that flip the way the world runs.
822
01:01:41.609 --> 01:01:45.470
Working on Bitcoin today is like working on the internet in the nineties.
823
01:01:45.849 --> 01:01:47.630
It might make sense to get some.
824
01:01:48.045 --> 01:01:51.585
But not only get some, but also work on some in case it catches on.
825
01:01:57.230 --> 01:02:02.610
There's also a case to be made for, you know, focusing on university students and introducing them to Bitcoin.
826
01:02:03.865 --> 01:02:07.725
Bitcoin is a political movement as much as it is a technological movement.
827
01:02:08.345 --> 01:02:12.845
You're forced to pick a side either as a global status or as a sovereign individual.
828
01:02:13.210 --> 01:02:16.910
And, as free citizens who believe in the promise of sound money,
829
01:02:17.210 --> 01:02:21.950
we need to ensure that those in universities today are on the right side of the future
830
01:02:22.275 --> 01:02:24.535
because in fact, they are the future.
831
01:02:25.155 --> 01:02:27.095
And this is aside from the fact that
832
01:02:28.994 --> 01:02:34.570
and this is aside from the fact that, the youth is and will be an important constituency
833
01:02:35.270 --> 01:02:37.610
that, no politician can afford to ignore.
834
01:02:39.645 --> 01:02:40.045
Then,
835
01:02:40.605 --> 01:02:41.105
Adi's
836
01:02:41.484 --> 01:02:42.625
sort of talking about
837
01:02:43.724 --> 01:02:50.970
getting recruitment, getting people in early, bought in, and sort of, like, recruiting in that developer pipeline.
838
01:02:52.070 --> 01:02:54.730
In addition to recruiting, there's,
839
01:02:55.595 --> 01:02:59.535
we we share some similarities in that we need to raise funds from the community.
840
01:02:59.994 --> 01:03:02.174
And so there's recruiting, there's fundraising,
841
01:03:03.035 --> 01:03:07.550
and then there's just a general awareness that there is this need and there
842
01:03:08.890 --> 01:03:12.670
is talent that is looking to be funded and there is talent that needs to be cultivated.
843
01:03:14.075 --> 01:03:15.375
Of those challenges,
844
01:03:16.395 --> 01:03:19.855
what challenges do you see from your perspective at OpenSats?
845
01:03:20.234 --> 01:03:21.695
Where where can we do better?
846
01:03:22.380 --> 01:03:23.359
Where are the challenges?
847
01:03:23.819 --> 01:03:28.559
I think it's it's an interesting problem because you have to, like, kind of address all of those issues.
848
01:03:29.395 --> 01:03:31.975
There's a study, I think, Okcoin released recently.
849
01:03:32.595 --> 01:03:35.175
I think, like, not a lot of people actually know
850
01:03:35.475 --> 01:03:37.335
what like, how Bitcoin is developed.
851
01:03:39.430 --> 01:03:45.769
I believe a lot of people think developers are paid or maybe there is some natural funding mechanism from mining.
852
01:03:46.595 --> 01:03:51.974
So I think like the first thing is general education and awareness to the community that this thing
853
01:03:52.355 --> 01:03:56.360
doesn't really maintain itself, like, in a in a stable way.
854
01:03:57.140 --> 01:04:02.600
You you need to let corporations, you need to let users, you need to let anyone leveraging the technology,
855
01:04:04.065 --> 01:04:15.160
You need to make sure they're aware that it's it's funded by a group of developers and designers and coders who are really just, like, not rationally acting. They are providing
856
01:04:15.619 --> 01:04:16.920
the they're providing,
857
01:04:17.940 --> 01:04:18.440
maintenance
858
01:04:18.740 --> 01:04:19.240
and,
859
01:04:19.975 --> 01:04:23.035
these things for free. No one nothing in the world is free,
860
01:04:23.575 --> 01:04:30.220
but we're we're lucky enough to have a few people out there who really care about the the mission and the vision of, you know, Satoshi,
861
01:04:31.400 --> 01:04:32.060
to actually
862
01:04:32.600 --> 01:04:36.615
build on this thing. Take like, these are some of the smartest people in the world dedicating,
863
01:04:37.155 --> 01:04:37.895
their time
864
01:04:38.275 --> 01:04:40.615
for free in in many senses. So,
865
01:04:41.475 --> 01:04:49.900
you know, I think the first thing is making sure that users, businesses, anyone leveraging the technology knows that it's important to give back to the people maintaining it.
866
01:04:50.825 --> 01:04:53.165
And then secondarily, you have these pipelines
867
01:04:53.704 --> 01:04:57.005
of maybe it's students or, you know, well trained developers
868
01:04:57.305 --> 01:04:58.525
coming into the system.
869
01:04:59.300 --> 01:05:01.320
But again, it's it's not
870
01:05:01.700 --> 01:05:04.840
economically we're we're all we're all big winners here. We're logical thinkers.
871
01:05:05.540 --> 01:05:10.425
The economically rational thing to do if you're a brilliant coder is to go work for Facebook.
872
01:05:11.125 --> 01:05:17.840
If you if you really want Bitcoin, go get a $1,000,000 a year job and buy some Bitcoin, like, screw the screw the code base. Right?
873
01:05:18.320 --> 01:05:21.520
But that's that's not what we're that's not what we're relying on.
874
01:05:22.080 --> 01:05:23.620
We need a way to,
875
01:05:24.080 --> 01:05:29.125
like, build from the ground up, like you said, to create an actual self sustaining ecosystem.
876
01:05:29.905 --> 01:05:36.590
And in order to do that, I think instead of relying on 1 or 2 large, you know, exchanges or corporations
877
01:05:36.890 --> 01:05:51.335
to do the majority of the funding, well, that's important. That moves the needle. But it's really, I think, to create a self sustaining ecosystem, you need, like, a grassroots movement where everyone gives back a little bit. If everyone who's leveraging Bitcoin, everyone who
878
01:05:51.830 --> 01:05:59.050
benefits from it, gave back just a little bit, well, then we have enough to we have enough funds, enough funding, enough training,
879
01:05:59.625 --> 01:06:02.285
to actually, like, continue to sustain the ecosystem.
880
01:06:06.585 --> 01:06:07.484
So, Adi,
881
01:06:08.520 --> 01:06:09.500
Ben touched on
882
01:06:11.320 --> 01:06:14.860
potentially some concerns that somebody might have starting their
883
01:06:16.255 --> 01:06:18.835
open source development career, if you will.
884
01:06:19.135 --> 01:06:19.635
Financial
885
01:06:20.095 --> 01:06:20.595
was
886
01:06:20.975 --> 01:06:22.515
the example Ben gave.
887
01:06:23.010 --> 01:06:26.470
What do you hear in talking with these younger folks who
888
01:06:26.770 --> 01:06:27.750
may be considering
889
01:06:28.050 --> 01:06:32.805
a career in in open source? Like, are there concerns? What are they excited about?
890
01:06:33.665 --> 01:06:34.165
Sure.
891
01:06:35.424 --> 01:06:36.724
You know, we've had about
892
01:06:37.424 --> 01:06:43.480
20,000 university students from over 50 countries around the world apply to our program this year. And
893
01:06:43.780 --> 01:06:48.760
the most common question that every student starts with is, will their governments ban Bitcoin?
894
01:06:49.865 --> 01:06:56.925
And as they go through our resources, you know, talk to us and join our seminars and, you know, study Bitcoin just like they would study TCPIP
895
01:06:57.545 --> 01:06:58.845
in a networking class.
896
01:06:59.330 --> 01:07:06.150
And remember, these are computer science students who are arguably grappling with concepts much harder than those that constitute Bitcoin.
897
01:07:06.850 --> 01:07:16.390
They quickly go from, you know, hearing about Bitcoin in the media as being this illegitimate child of technology to realizing that the Bitcoin network is, in fact,
898
01:07:16.710 --> 01:07:26.555
decentralized enough, resilient enough, secure enough that even if you were to shut down all nodes but 1, the network could still run as is and bootstrap itself again.
899
01:07:27.655 --> 01:07:32.395
That, you know, the Bitcoin protocol is in fact one of the most important
900
01:07:33.020 --> 01:07:38.480
and beautiful innovations of the 21st century that can change the course of human history.
901
01:07:38.780 --> 01:07:39.599
That understanding,
902
01:07:40.195 --> 01:07:41.575
you know, coupled with
903
01:07:41.955 --> 01:07:44.935
the energy and clairvoyance that the youth can bring to the table
904
01:07:45.315 --> 01:07:47.575
is striking and remarkable to see.
905
01:07:48.460 --> 01:07:52.720
Having said that, there's a ton of noise in the space with other crypto ecosystems,
906
01:07:53.579 --> 01:07:56.799
the lavish marketing budgets, and catchy memes.
907
01:07:57.805 --> 01:08:04.225
But, you know, so we get all kinds of questions around proof of stake and why can't we have our own coin to decentralize dentistry.
908
01:08:05.050 --> 01:08:12.510
But, those get quickly answered by themselves when they figure out why is HTTP the most dominant way of exchanging information over the Internet
909
01:08:12.835 --> 01:08:18.695
and how Bitcoin is similar in terms of being the dominant way of exchanging value over the Internet.
910
01:08:19.235 --> 01:08:20.695
We have this internal aforism
911
01:08:21.570 --> 01:08:26.070
in in in our cohorts where and it goes like blockchain has only 2 applications.
912
01:08:26.690 --> 01:08:28.950
1 is money, and the other is marketing.
913
01:08:29.970 --> 01:08:30.470
And,
914
01:08:31.145 --> 01:08:40.284
you know, you as technologists, you know, we understand that it's never the means, it's never the marketing that changes the world. It's technology that works as intended that does.
915
01:08:40.949 --> 01:08:44.409
When it comes to helping these students, you know, discover careers in Bitcoin,
916
01:08:44.790 --> 01:08:51.285
there's a ton of thought and work yet to be put in. And, and congratulations to organizations like Spiral,
917
01:08:51.745 --> 01:08:54.645
Chaincode Labs, Brink, and OpenSats for
918
01:08:55.120 --> 01:08:58.340
leading from the front line and, and showing us the way.
919
01:09:02.445 --> 01:09:06.145
We've we've talked a bit about individuals and how they can kind of progress
920
01:09:07.085 --> 01:09:07.825
and and contribute,
921
01:09:08.205 --> 01:09:15.730
but there's also a lot of the work that Spiral's doing is is project based. And and and those projects also go through a sort of evolution
922
01:09:16.110 --> 01:09:19.010
from sort of ideation one developer onwards.
923
01:09:19.525 --> 01:09:32.460
How do you guys think about that progression at Spiro? Yeah. So we're we're we're gonna publish some some content about this very soon, and we're we're very much thinking about it in this kind of 4 stage process, which I'll try and go through very, very quickly. So
924
01:09:32.840 --> 01:09:36.620
phase 1 very much revolves around, like, a proof of concept. So
925
01:09:37.204 --> 01:09:41.704
an individual, a team of developers have an idea that is gonna help move the ecosystem
926
01:09:42.324 --> 01:09:45.710
forward in areas of of that we talk about security, privacy,
927
01:09:46.010 --> 01:09:46.510
decentralization,
928
01:09:46.970 --> 01:09:48.350
or whatever it might be.
929
01:09:48.730 --> 01:09:53.070
And at this stage, they're very much trying to develop their project architecture.
930
01:09:54.385 --> 01:09:57.685
They will be doing some pitching to organizations
931
01:09:58.065 --> 01:09:58.885
such as ourselves,
932
01:10:00.065 --> 01:10:04.980
who would provide no strings attached funding to help them get off the ground.
933
01:10:05.520 --> 01:10:11.780
And so, like, a a successful exit from that phase might like, some alpha piece of software
934
01:10:12.445 --> 01:10:21.665
that it has a code base that makes it easy for new contributors to understand what is happening and, also contribute to it as well as perhaps wider
935
01:10:22.450 --> 01:10:24.950
buy in from the from the wider Bitcoin ecosystem.
936
01:10:25.970 --> 01:10:27.670
Phase 2 is this kind of
937
01:10:28.050 --> 01:10:28.550
community
938
01:10:29.010 --> 01:10:38.255
development process. So everyone here is very much aware that this this Bitcoin thing that we're building, this new money, has a huge community behind it helping to drive it forward.
939
01:10:38.560 --> 01:10:40.500
And, we want to see that
940
01:10:40.960 --> 01:10:43.699
developed developed for individual project projects as well.
941
01:10:44.320 --> 01:10:50.475
So projects might do this by creating a project website, which clearly outlines the vision for the project,
942
01:10:51.175 --> 01:10:54.475
helps new people understand how they can contribute, maybe outlines,
943
01:10:55.015 --> 01:11:02.700
their road map as well, and perhaps some start developing some some async communication channels, whether it be on Discord or Slack or IRC,
944
01:11:04.585 --> 01:11:10.285
as well as raising awareness for their projects as well, whether it be podcast, articles, or social media.
945
01:11:11.550 --> 01:11:19.895
And, again, a successful exit from that phase might look like they have multiple contributors who are fixing various types of bugs, adding documentation,
946
01:11:20.275 --> 01:11:21.335
or adding new features.
947
01:11:21.955 --> 01:11:30.590
Phase 3 is this kind of multi entity funded phase where we hope to see a project, fully sustainable by having multiple,
948
01:11:31.290 --> 01:11:32.510
multiple donors.
949
01:11:33.675 --> 01:11:39.055
And this might be facilitated and made a bit easier if a project starts to develop a foundation
950
01:11:39.515 --> 01:11:47.590
around their project that makes it easier for larger organizations who now see this piece of technology as, like, a critical part of their tech stack.
951
01:11:48.290 --> 01:11:48.790
And
952
01:11:49.585 --> 01:11:57.525
want to find an easy way to to donate without having to do the kind of long process of due diligence on individuals and and
953
01:11:58.100 --> 01:12:00.920
contributors maybe outside of their their jurisdiction.
954
01:12:02.580 --> 01:12:04.760
And so a successful exit from that is again,
955
01:12:05.300 --> 01:12:07.800
multiple entities fund funding a project,
956
01:12:08.215 --> 01:12:12.074
and we start to see this project being used in production environments
957
01:12:12.695 --> 01:12:26.375
close to, like, beta type type of software. And then lastly, it's like we try we want projects to be sustainable without Spiral. So if Spiral were not fund funding this project, it wouldn't collapse, and it wouldn't cause significant damage,
958
01:12:27.475 --> 01:12:28.615
to the project ever.
959
01:12:29.555 --> 01:12:38.330
And at this stage, the project's really kind of developed its own culture, its own identity, and can can truly stand alone without a single entity.
960
01:12:38.950 --> 01:12:41.770
And so we we very much look at these projects as
961
01:12:43.165 --> 01:12:46.864
active projects within the Bitcoin ecosystem that will
962
01:12:47.485 --> 01:12:50.545
be around for for the super long term and ultimately,
963
01:12:50.930 --> 01:12:59.255
you know, be a part of of of Bitcoin's Bitcoin's legacy. So that's, like, how we we we try to try to think things through and hopefully hopefully,
964
01:13:00.034 --> 01:13:03.094
you know, keep funding as as decentralized as possible.
965
01:13:04.355 --> 01:13:05.735
Then Connor mentioned,
966
01:13:07.440 --> 01:13:12.980
one way that a company can contribute to the space is if they're using the software, they can financially
967
01:13:13.840 --> 01:13:14.660
support it.
968
01:13:15.215 --> 01:13:18.275
You're in an interesting spot because you're both
969
01:13:18.575 --> 01:13:21.715
a for profit company with a Bitcoin company and
970
01:13:22.650 --> 01:13:23.150
OpenSats
971
01:13:23.770 --> 01:13:26.110
donating on the charitable side. So
972
01:13:26.490 --> 01:13:31.950
being in that unique position, how do you when you have your Bitcoin company hat on, how do you think about
973
01:13:32.614 --> 01:13:33.114
contributing
974
01:13:33.655 --> 01:13:34.474
to the ecosystem?
975
01:13:35.655 --> 01:13:48.880
Yeah. That's, that's a really interesting one, and, like, hopefully, it's a challenge that the open source ecosystem can kind of do better on. There are a few, I think, good really good actors in the space who are doing what they can to give back at least financially.
976
01:13:49.420 --> 01:13:54.075
But there's tons of ways to give back. Like, we're we're a poor start up, I can't just donate $1,000,000
977
01:13:54.695 --> 01:13:57.355
to open source, as much as I would love to.
978
01:13:57.815 --> 01:13:58.315
So
979
01:13:59.090 --> 01:14:03.110
earlier we talked about, you know, developers themselves maybe not being economically
980
01:14:03.650 --> 01:14:06.630
incentivized or it's not economically rational for them to
981
01:14:06.965 --> 01:14:09.785
pursue open source projects outside of just goodwill.
982
01:14:10.725 --> 01:14:12.965
But, like, as a company, why would it help?
983
01:14:13.525 --> 01:14:17.770
I think recruitment is a big one. I got Ben the car man and Connor in the audience. I think,
984
01:14:18.490 --> 01:14:40.290
without without us, you know, going to these hackathons, without us giving back to some of these open source projects, I'm not gonna be able to recruit them. Like, that that's what that's what drives a lot of people in this space are working on the these projects like that. I can't always just say add a widget, add a button, and they're gonna be satisfied with their job. So for me, there is some recruiting benefits, some marketing benefits.
985
01:14:41.310 --> 01:14:43.090
You know, I I also think that, like,
986
01:14:43.825 --> 01:14:56.889
when you the the beauty of open source is that you can build on it and I can build on it and we both benefit. Like, it is a public good that we both win from developing on top of. It's more secure. It's faster. It's it's better maintained.
987
01:14:57.270 --> 01:15:07.245
And so, like, as you just continue layering on as a company building on these, like, core packages, whether it's Bitcoin s or or, you know, tons of open source things that we use,
988
01:15:08.025 --> 01:15:12.210
everyone wins. And so when I give back or with with the big bang company,
989
01:15:12.670 --> 01:15:14.510
you get you get a benefit as well.
990
01:15:15.389 --> 01:15:22.265
I also think, like, there are some ways, like, especially us. We're consumer facing applications. So a little bit of what we can do is education,
991
01:15:22.725 --> 01:15:24.740
highlighting projects that we really like,
992
01:15:25.060 --> 01:15:33.160
giving bounties for, you know, things in our road map that, we just don't have time to develop. One thing that we've tried to hack together is we go to hackathons,
993
01:15:34.525 --> 01:15:56.114
and we add prizes to the end the the very end of the pool. So a lot of a lot of the issues is hackathon projects are sometimes kinda half baked. They get 80% of the way done and then no one finishes them. So, you know, as a bootstrapping startup, what I can do is go give someone another $500 or a little bit of Bitcoin to finish that off, write a blog post about it, get their actual project out there, and hopefully users on it.
994
01:15:56.735 --> 01:16:12.545
So so there's a lot of ways to give back including, like, the the one that I'm most excited about. We just, like, we rolled out referral codes, in our application. So this is an easy one. If you sign up with the, you know, the word open sats or donate, every time you make a purchase through us, a portion of your proceeds go to,
995
01:16:12.845 --> 01:16:14.705
fund, you know, Bitcoin core development.
996
01:16:15.165 --> 01:16:21.590
And so that's, like, you know, little things that just you know, we're gonna we're gonna be streaming stats towards, Bitcoin core developers,
997
01:16:21.969 --> 01:16:26.045
you know, every day, all day. And so I think it's just these little things.
998
01:16:26.445 --> 01:16:29.824
You have to get creative. Like I said, if you if you got you got a $1,000,000,000,
999
01:16:30.844 --> 01:16:33.265
just throw some money at some devs probably.
1000
01:16:34.059 --> 01:16:36.080
If if you're poor like we are,
1001
01:16:36.540 --> 01:16:44.785
you gotta get creative, but there's there's a lot of really, interesting ways to do it. And I didn't name them all, but, you know, that's that's what we've come up with so far.
1002
01:16:45.245 --> 01:16:45.745
So
1003
01:16:46.364 --> 01:16:48.465
we clearly have a lot to say since we're
1004
01:16:48.844 --> 01:16:49.665
over time.
1005
01:16:50.950 --> 01:17:02.945
So I I can speak on behalf of these guys. I'm sure to say if you if you wanna learn more, feel free to grab any of us after this and and we can discuss more. And I would give these guys a round of applause for the work they've been doing.
1006
01:17:36.345 --> 01:17:38.765
Yeah. He's a good man. Listed all the time.
1007
01:17:39.305 --> 01:17:47.740
You know, before we dive into all that, I'd love to just do a quick introduction of all our guests here. Maybe, you know, say who you are and, like, what kind of experiences you have in lightning,
1008
01:17:48.360 --> 01:17:51.740
but, like, more specifically in the commerce space itself. So, Elise.
1009
01:17:52.445 --> 01:17:55.745
Great. So I'm the outlier on this panel as the non dev.
1010
01:17:56.285 --> 01:18:00.145
I'm a VC investor that's focused purely on Bitcoin. And
1011
01:18:00.525 --> 01:18:07.360
last year and this year, we've been focused a lot on lightning and how it can impact commerce in developed and emerging markets.
1012
01:18:08.505 --> 01:18:09.005
Aleif,
1013
01:18:09.385 --> 01:18:13.565
us developers love spending time with you, so I'm glad that you're with us.
1014
01:18:14.745 --> 01:18:16.125
I'm a rock star dev.
1015
01:18:18.670 --> 01:18:20.690
I contribute to BTC based server.
1016
01:18:21.790 --> 01:18:23.410
Started the whole thing with Nicholas,
1017
01:18:24.750 --> 01:18:25.490
and then
1018
01:18:26.165 --> 01:18:28.465
I am VP of engineering of at Strike.
1019
01:18:29.804 --> 01:18:31.985
Yay? Are there Strike people here?
1020
01:18:33.725 --> 01:18:34.225
Okay.
1021
01:18:35.290 --> 01:18:44.865
Yeah. Strike started from a small team that open source team that did Zap Wallet. I'm sure a lot of you are familiar with that. And then I was employee number 1
1022
01:18:45.405 --> 01:18:48.625
specifically for Strike, and, here I am today.
1023
01:18:50.205 --> 01:19:05.864
So I'm Ben Arck. I'm a Bitcoin hobbyist tinkerer, and I tried to encourage a few years ago more of a maker scene, so we make our own nodes, but we should also be making our own points of sale hardware, hardware wallets, ATMs, vending machines, all these things which are going to run on Bitcoin and lightning payments.
1024
01:19:06.329 --> 01:19:13.070
And there wasn't much of a scene there, so I wanted to try and build 1 and then make some projects which people could build, and then from that, I then developed
1025
01:19:13.449 --> 01:19:23.435
I started Ellen Bits, which is a really nice sort of wallet account system you can put in your node. It's a bit like WordPress for your node. You can extend it in any direction which is relevant to you, so if your merchant has got extensions and so on.
1026
01:19:24.380 --> 01:19:26.480
So, yeah, just a hobbyist tinkerer,
1027
01:19:27.099 --> 01:19:31.360
who's, you know, been lucky enough to kind of break new ground with some of the cool
1028
01:19:32.460 --> 01:19:32.960
lightning
1029
01:19:33.495 --> 01:19:34.315
stuff we're able
1030
01:19:34.615 --> 01:19:36.295
to do. Cool.
1031
01:19:36.855 --> 01:19:39.755
I'm Andre Neves, CTO and cofounder at Zevity.
1032
01:19:40.295 --> 01:19:44.480
We are a gaming fintech company, so we build tools for game developers and gamers
1033
01:19:45.020 --> 01:19:45.760
to enable
1034
01:19:46.220 --> 01:19:49.200
the powering of your game points, your game rewards, your game
1035
01:19:49.580 --> 01:19:51.760
assets in Bitcoin, right, through Lightning.
1036
01:19:52.415 --> 01:19:55.795
So I'm just honored to be in this panel with all these great gentlemen and
1037
01:19:56.095 --> 01:20:04.179
ladies. So thanks, Tony, for for standing up. Yeah. Yeah. Yeah. Thank you, guys. My name is Tony Georgio. I'm a I'm a Lightning developer myself working at Impervious right now.
1038
01:20:04.880 --> 01:20:09.840
So let's get started with some, like, groundbreaking news here. So, Jack Mahler's,
1039
01:20:10.745 --> 01:20:12.844
yesterday announced, from Strike
1040
01:20:13.145 --> 01:20:14.125
some huge integrations,
1041
01:20:14.505 --> 01:20:21.140
that really, like, changed the game for even the United States, the ecommerce space, but also the physical commerce space as well.
1042
01:20:21.600 --> 01:20:29.114
Rockstar, would you like to kinda, like, give us some perspective there and, like, you know, what was the announcement and, like, how how what, you know, what does it mean to you?
1043
01:20:30.534 --> 01:20:33.514
To me, when I said here I am, it's like
1044
01:20:33.974 --> 01:20:40.290
culmination of all the work that happened over past 2 years and what it is, like, 10 months for me.
1045
01:20:40.909 --> 01:20:41.310
And,
1046
01:20:42.110 --> 01:20:48.715
I'm very unfortunate that this panel is, like, after Jack's speech. Last year, it was easier. It was, like, my panel, the Jack's speech
1047
01:20:49.895 --> 01:20:53.989
because it's so hard to follow after Jack. Right? You like the announcement?
1048
01:20:54.530 --> 01:20:56.310
Yeah. Yeah. Yeah.
1049
01:20:58.290 --> 01:20:58.790
So
1050
01:20:59.810 --> 01:21:00.310
it's
1051
01:21:01.170 --> 01:21:02.070
it's just,
1052
01:21:03.155 --> 01:21:05.735
again, culmination of everything that we've been doing,
1053
01:21:06.434 --> 01:21:08.775
for the last few years. And
1054
01:21:10.449 --> 01:21:14.710
as Jack was so excited, yeah, with that buying coke over tour.
1055
01:21:15.170 --> 01:21:20.085
Our yeah. We we couldn't name it like that, but it is all about that. It's about
1056
01:21:20.465 --> 01:21:22.085
having that freedom
1057
01:21:23.265 --> 01:21:26.165
to use the money that you want to use
1058
01:21:26.590 --> 01:21:28.769
and spend it how you want to spend it.
1059
01:21:29.150 --> 01:21:29.650
So
1060
01:21:30.829 --> 01:21:33.969
glad that that came out and I'm looking forward to
1061
01:21:35.725 --> 01:21:37.905
some other announcements that are coming soon.
1062
01:21:38.605 --> 01:21:42.370
Awesome. It feels like, lightning announcements are just left and right these days.
1063
01:21:43.170 --> 01:21:44.870
I wanted to talk a little bit about,
1064
01:21:45.490 --> 01:21:50.470
you know, Lightning as Commerce payments. You know, we really enter this era here where
1065
01:21:50.945 --> 01:21:55.365
we haven't been able to do commerce in the way that, like, Lightning Network changes the game. We have,
1066
01:21:56.065 --> 01:21:59.365
the near instant payments of Lightning. We have micropayments,
1067
01:22:00.250 --> 01:22:08.750
Both, you know, the traditional credit card networks and even Bitcoin on chain layer itself aren't able to fully service, you know, some of the amazing use cases we can get with Lightning.
1068
01:22:09.224 --> 01:22:12.445
I'm really curious about, from your guys' perspective, all the unique,
1069
01:22:12.985 --> 01:22:27.679
you know, innovations happening in the Lightning space, just across the board. There's you we could have a whole panel just on that. But, you know, from your own experiences, like, what is really exciting that we're now able to see in in in just like the digital space itself
1070
01:22:28.235 --> 01:22:29.615
that Lightning now enables?
1071
01:22:31.195 --> 01:22:33.695
Anyone could start off with that. So, I mean,
1072
01:22:34.315 --> 01:22:37.900
that's the thing which attracts me to working on Lightning is that feeling of breaking new ground,
1073
01:22:38.460 --> 01:22:49.045
and there's that kind of concept of scheomorphic design, like, we've got a new tool set now to do things with money we should not have been able to do, and then to try and imagine those things and and and and and and build the tools and and experiments,
1074
01:22:50.465 --> 01:22:53.125
and it's quite hard, and that's why you need sort of real world
1075
01:22:53.425 --> 01:23:08.845
use case and real world feedback from people using the technology. So most of the stuff I put was off the back of a, you know, a bar in Berlin, which accepted Bitcoin, and now you think you've got whole countries, which are accepting Bitcoin and like doing they have lightning payments. So you get all this great data coming in, which makes it a little bit easier to innovate,
1076
01:23:09.465 --> 01:23:22.475
but you're dead right, and it's a it's kind of like a snowball of ideas, so something which I was I'm really excited about with Lightning is is just being able to split payments at point of sale. So, you know, you pay for something, and then within that
1077
01:23:23.335 --> 01:23:27.790
piece of production, like a coffee shop, for example, everybody could just be paid instantly into their wallets,
1078
01:23:28.190 --> 01:23:33.890
and that's something which is only possible by using, you know, these sort of lightning transactions, but you could scale it up to, like, larger production.
1079
01:23:34.350 --> 01:23:45.315
So you could have, like, you could buy your laptop and the payment could be split to different manufacturing distribution, and it could be split down again into those different departments. And then as well as, like, it could impact via tax. So, you know, if if
1080
01:23:46.219 --> 01:23:47.840
there is a Bitcoin future,
1081
01:23:48.140 --> 01:23:54.000
then tax collection will be hard and one more easy way to collect taxes, you know, our point of sale is through value added tax,
1082
01:23:54.355 --> 01:24:06.610
and when that happens, perhaps the user could say, well, I want x amount to go here, I want x amount to go there, and it's instant tax at point of sale. So that that but imagining those kind of use cases for for for money is is very hard,
1083
01:24:07.710 --> 01:24:26.910
and this is why I like Ellen Bits. Like, a lot of that concept of splitting payments, for us, just came from an extension where Crypto Graffiti did a DJ set, then we had a QR code on the screen, people could tip, and and then if they tipped enough, they would get a download link for the song, but then every time they tip, 90% would go to the music, producer and then 90 10% would go to the DJ himself,
1084
01:24:27.315 --> 01:24:33.094
and it was just that one time when we experimented with split payments, we then experimented with it more, now we've got an extension
1085
01:24:33.395 --> 01:24:35.735
specifically for split payments. So, yeah,
1086
01:24:36.460 --> 01:24:39.119
it's it's you have all this kind of legacy,
1087
01:24:39.820 --> 01:24:43.199
baggage from the ex of what you think you can do with money,
1088
01:24:43.555 --> 01:24:46.215
and then, now we have this new type of money, this new
1089
01:24:46.515 --> 01:24:56.430
theoretically, we've known that this thing would be possible, but we have been able to have tiny, tiny, tiny, little transactions, then thinking of new designs and new projects and new things you can build on top of it is very exciting,
1090
01:24:57.130 --> 01:25:05.405
and a great place to be, you know, in the space. And that's why we saw this great innovation because obviously, you know, we're expanding it with the tool, which didn't previously exist for developers and,
1091
01:25:06.264 --> 01:25:07.244
yeah, and builders.
1092
01:25:07.850 --> 01:25:18.665
Yeah. I think one of the one of the beautiful things about Bitcoin is that it turned this new form of money, made it digital and fully programmable on Lightning, makes it so much more approachable. Right? So this is a very good example of how,
1093
01:25:19.045 --> 01:25:23.945
you know, we're just scratching the surface of what it can do, what it what is able to be done with Lightning.
1094
01:25:24.324 --> 01:25:45.590
I think an example is looking at the dot com in 2,001 and looking out, you know, right now we're streaming 8 k video games across the Internet. It doesn't matter where you are in the world and you have low latency, the people building the backbones of the Internet back in the day were not thinking of serving 8 k video games, right? They were thinking of maybe sending messages across. So I think we're just scratching the surface now with money, and money is such a societal,
1095
01:25:46.290 --> 01:25:49.670
an important piece to society, and I think that's going to revolutionize
1096
01:25:50.125 --> 01:25:53.985
much more than just money, it's going to revolutionize industries, it's going to revolutionize how society
1097
01:25:55.005 --> 01:25:58.864
and citizens interact with each other. And I think Lightning is just
1098
01:25:59.165 --> 01:26:01.920
that pivotal piece, and you're seeing that with all
1099
01:26:02.540 --> 01:26:10.495
the adoptions and announcements, Stripe, Kraken, BitPay, Robinhood, right? So it's it's really that pivotal climax piece, and I think
1100
01:26:10.955 --> 01:26:15.215
next 2 years is going to be tremendous growth for Lightning, and and we're just, you know,
1101
01:26:15.640 --> 01:26:17.740
just happy to be here building on this technology,
1102
01:26:18.120 --> 01:26:19.180
you know, with everyone.
1103
01:26:20.680 --> 01:26:25.725
On the start up side, we're also seeing very early stage companies take a broader
1104
01:26:26.185 --> 01:26:27.065
range of,
1105
01:26:27.465 --> 01:26:28.685
experiments and projects,
1106
01:26:29.625 --> 01:26:34.845
forward. And so, for example, we're seeing the integration of Lightning payments for brick and mortar,
1107
01:26:36.140 --> 01:26:42.560
retail transactions like we saw with led by Ibex, Mercado, and El Salvador with the adoption of Bitcoin as legal tender.
1108
01:26:42.905 --> 01:26:45.405
We're seeing the same sort of happen online.
1109
01:26:45.785 --> 01:26:53.020
We are seeing experimentation now with browser extensions so that you can have your Lightning wallet sort of follow you around on the web.
1110
01:26:53.320 --> 01:26:54.620
I think that we underestimate
1111
01:26:55.080 --> 01:26:56.220
how broadly,
1112
01:26:57.560 --> 01:27:00.460
payments exist in the world. Everything where we're transacting
1113
01:27:00.985 --> 01:27:07.405
where there's some value, of course, payments is important. And through Lightning, we're able to now do that efficiently. So for instance,
1114
01:27:07.784 --> 01:27:09.510
a portfolio company that we invested in
1115
01:27:12.309 --> 01:27:16.489
Synch Chat, which I bet a lot of people in this room are familiar with, where,
1116
01:27:16.949 --> 01:27:19.289
Bitcoin can just be your native financial
1117
01:27:20.335 --> 01:27:20.915
chat, currency.
1118
01:27:21.535 --> 01:27:26.995
So it's been interesting to see opportunities emerge for entrepreneurs in the lightning space,
1119
01:27:27.695 --> 01:27:28.195
recently.
1120
01:27:30.369 --> 01:27:53.080
And it really is snowballing as well, isn't it? When you walk around and you meet some of the people who are building things and the product all the projects now which are now having lightning, I was saying to someone, like, I think a year ago or something, I was able to kind of keep abreast of most of the projects which were in Lightning were being built, you know, the free and open source stuff and and some of the companies as well. But now I just can't keep up. Like, there's there's so many great projects. That's right. So we're probably talking to a a few 100 founders
1121
01:27:53.460 --> 01:27:54.120
a year.
1122
01:27:54.635 --> 01:27:55.135
And,
1123
01:27:55.755 --> 01:28:00.175
although sometimes I think Bitcoin gets maligned for being less dynamic
1124
01:28:00.475 --> 01:28:02.575
or creative, we're seeing the exact
1125
01:28:03.060 --> 01:28:09.639
opposite on the venture side. So the types of moonshots that people are taking are just much more broad,
1126
01:28:10.020 --> 01:28:10.760
and ambitious.
1127
01:28:11.534 --> 01:28:19.395
Maybe, I can also bring up that it's been nice to see the design space open up through changes made at Bitcoin core level.
1128
01:28:20.010 --> 01:28:28.030
So earlier this week, we were we were just talking backstage about an announcement that came out before the conference, which was Lightning Labs' Taro announcement,
1129
01:28:29.545 --> 01:28:36.925
which was a result of something that was enabled because Taproot was activated last year on Bitcoin Core. So Taro
1130
01:28:37.600 --> 01:28:38.340
will ultimately
1131
01:28:39.040 --> 01:28:40.260
allow you to,
1132
01:28:40.960 --> 01:28:48.765
exchange stablecoins, for example, on Lightning Network, which I think will have I anticipate will have a great impact on commerce on Lightning.
1133
01:28:49.545 --> 01:28:59.000
I think one of the really cool pieces about Lightning, and just piggybacking off of that, is that, there are so many companies and so many teams building so many different things. And unlike layer 1 Bitcoin,
1134
01:28:59.460 --> 01:29:07.675
which is a consensus based mechanism, we all have to agree to the way the system works. With Lightning, it is it is different, right? It is not like that. So,
1135
01:29:07.995 --> 01:29:20.775
Ben and I can have an agreement and we can exchange value on Lightning even though no one else in the network has the same agreement. And I think that is beautiful because it leads to a lot of innovations. You have things like, well, Swell, you have lnurl, you have lightning address, you have
1136
01:29:21.255 --> 01:29:24.855
lnurl POS, and these are just things built on top of lightning.
1137
01:29:25.335 --> 01:29:34.930
So it's great for innovation, but it also creates for potential segmentation, right? We're not talking about certain companies pursuing this, certain companies pursuing that, and so
1138
01:29:35.310 --> 01:29:36.450
it's just a very
1139
01:29:37.224 --> 01:29:52.420
exciting space. It's very innovative and very fast paced, you know, strike ships all the time, 70 ships all the time. It's it's it's fascinating to see the speed at which technology is evolving. And I think, again, I'm just going to say it again, I think we're just scratching the surface. Just last, I believe it was 2 weeks ago,
1140
01:29:52.720 --> 01:29:54.820
Zebedee released a product called Zebedee Streamer,
1141
01:29:55.345 --> 01:29:58.965
which basically allows any person, any content creator from
1142
01:29:59.905 --> 01:30:15.145
anywhere in the world, essentially, to put a QR code in their stream and have interactions with their audience members, right? So you're now breaking that 4th wall between your audience who used to be a passive participant of this engagement and is now using a tiny little bit of Lightning,
1143
01:30:15.525 --> 01:30:25.680
transaction to interact with you, to send you a message, and so you you break that 4th wall. And this is something that is platform agnostic, right? We're just using Lightning, it doesn't matter if you're using on Twitch or YouTube
1144
01:30:26.380 --> 01:30:44.290
or wherever it is you're streaming. This is just one of the products that allows, you know, people to interact, so you can get your audience in Japan, can help you in your guild, in your quest, or in your in your stream if you're in the United States or in your Brazil or in India. Right? So the beauty of Bitcoin being global
1145
01:30:44.665 --> 01:30:54.850
enables for these types of innovations, which weren't possible before. You can't easily send a dollar to your friend in Japan. How does that actually work? Right? And with Bitcoin, you know, and with Lightning, it's instant.
1146
01:30:55.390 --> 01:30:57.170
So I think that's that's a very exciting
1147
01:30:57.710 --> 01:30:58.770
What I like about,
1148
01:30:59.615 --> 01:31:02.595
you know, people building more products and and, projects
1149
01:31:02.975 --> 01:31:04.755
like with the, video streamer,
1150
01:31:05.695 --> 01:31:13.610
so, with ln euro pay, so that you're using ln euro and with lnurl pay as part of the stand where you can attack attach a memo
1151
01:31:13.989 --> 01:31:17.530
note. And for for most use cases, that's not really very useful,
1152
01:31:18.725 --> 01:31:21.305
or people weren't using it early on. Whereas,
1153
01:31:21.845 --> 01:31:39.645
because I but we got a similar sort of extension in LN Bits, And then having been able to pay a note and then on your pay and then write a little note. And then for the the the, you know, the the viewer of of YouTube stream, for example, being able to see that comment pop up in the video with a little animated GIF or something is very cool.
1154
01:31:39.950 --> 01:31:49.795
And then that means so it kind of guides the the direction of, you know, what sort of stuff is what sort because I don't know, as a wallet standard, obviously, the wallets need to implement these things.
1155
01:31:50.175 --> 01:31:56.435
So it's almost like chicken and egg, like, without them implementing, you can't build Right. For those for that for those implementations,
1156
01:31:57.420 --> 01:32:03.840
but then, you know, without you building something to show that there's a need for it, then they're not gonna implement it. So it's it's a really interesting kind of
1157
01:32:04.735 --> 01:32:06.915
watching watching those protocols kind of evolve,
1158
01:32:07.375 --> 01:32:11.235
specifically something like Aligneur because it's so ground up and built by developers.
1159
01:32:11.535 --> 01:32:15.100
Because for me, the biggest thing is not not just about technology,
1160
01:32:15.480 --> 01:32:23.454
but about companies growing. That's when you were saying there were new companies getting started, it'll ease you. Also, like, existing companies, when you look at Strike
1161
01:32:23.994 --> 01:32:27.534
as a company growing I don't know. Where where are my Strike employees?
1162
01:32:28.420 --> 01:32:29.320
There we go.
1163
01:32:29.780 --> 01:32:33.080
So you see oh, over there over there. We're everywhere.
1164
01:32:33.460 --> 01:32:35.400
But there is, like, Manuela, Frank,
1165
01:32:36.125 --> 01:32:37.985
Casey, Joshua, Pablo.
1166
01:32:38.445 --> 01:32:45.185
Like, all this exciting talent that's joining not from, you know, companies you never heard of, but these are people that are joining
1167
01:32:46.510 --> 01:32:50.530
from either companies that are still not in the game, but will be like Google,
1168
01:32:50.989 --> 01:32:54.130
or companies that are getting into the game like Robinhood.
1169
01:32:54.815 --> 01:32:55.315
So
1170
01:32:55.695 --> 01:32:57.635
I'm really excited that Lightning
1171
01:32:58.095 --> 01:33:02.915
as a protocol is facilitating all of that and I'm looking forward to see how things will develop.
1172
01:33:03.780 --> 01:33:21.320
Yeah. Absolutely. So we touched on it a little bit on this panel already, but I wanna talk about, for a second a little bit about how the Lightning Network, this open monetary network, is able to facilitate payments all across the globe. You know, we talked about, you know, sending payments to someone in Japan, you know, micro payments at that level.
1173
01:33:21.700 --> 01:33:32.825
You know, Andre, do you want to kind of, like, you know, get into that a little bit more? Now you have gaming communities probably all around the world. Right? How has, how has being able to stream, you know, micropayments, being able to,
1174
01:33:33.365 --> 01:33:48.545
you know, have 2 users that don't know each other on complete side of the world. How has this impacted their lives? And and and, you know, down the panel, we can get in, like, El Salvador and other emerging markets are use using it. Yeah. I think for for us specifically at Zebedee, we actually have a very large,
1175
01:33:49.085 --> 01:33:51.825
Latin American community of users, Brazil specifically.
1176
01:33:52.410 --> 01:33:56.750
We recently announced an integration with BIPA, which is a Lightning based exchange in Brazil,
1177
01:33:57.290 --> 01:34:03.284
and that in that integration, you actually can receive your SATs inside of Zebedee by playing games, by winning tournaments,
1178
01:34:03.585 --> 01:34:08.150
and then you can, you know, one button click send to your Beeper account, which automatically
1179
01:34:08.610 --> 01:34:20.105
FX converts into Brazilian reais, right? So we're talking about using Lightning as the rail in between and at the Edge nodes you can use FX conversions. So, what we're seeing in Brazil is that,
1180
01:34:20.824 --> 01:34:22.525
Brazil is one of the most connected
1181
01:34:23.304 --> 01:34:25.885
countries when it comes to people that have access to the Internet.
1182
01:34:26.390 --> 01:34:31.370
Everyone has smartphones, etcetera, and it's a huge gaming, you know, community as well. So
1183
01:34:32.070 --> 01:34:35.370
folks are playing games powered by Zebedee, and they're earning Satoshis,
1184
01:34:35.825 --> 01:34:38.165
and while these are primarily microtransactions,
1185
01:34:38.545 --> 01:34:42.085
and we're talking a 100, 200, a 1000, a couple 1000 Satoshis,
1186
01:34:42.785 --> 01:35:04.369
it's not actually micro. The impact is actually macro. What we're seeing is that people are accumulating these Satoshis, and whenever they're ready, whether they want to use the Satoshis themselves, the Bitcoin itself, or they want to transfer back to the Brazilian reais, they can do that, and the impact is is very measurable. We we have seen people pay their rents. We have people pay their grocery stores. We have people, you know, buy buy medicine for family members,
1187
01:35:04.670 --> 01:35:10.449
and this is all enabled by, you know, the ability of having money that is global. We are an American company,
1188
01:35:10.915 --> 01:35:30.244
American based company. We couldn't do that if you know, to to someone in Brazil because we can't easily send that value across to them. Right? And now in Bitcoin with Lightning, Lightning is is digital money, it's it's programmable money and it lives on the Internet. Right? So all of that is possible and the impact is very real. Brazil is just the first, you know, country that we're seeing that that big change is happening,
1189
01:35:30.625 --> 01:35:46.435
for us in the gaming industry, but I think there's there's many, many more. I think, you know, nations in the African continent are are you know, emerging markets are exploding through the roof, adoption and, you know, financial inclusion and all of that. So I think it's I'm gonna repeat myself. We're just scratching the surface.
1190
01:35:46.975 --> 01:35:56.300
Lightning is going to essentially take over. It's going to be the story that we're going to be talking about for the next 5 to 10 years, and it's great to be here at the very beginning. Right? I think that's where we're headed.
1191
01:35:58.280 --> 01:36:13.540
Yeah. Rockstar, do you maybe wanna, like, shine a little bit light on El Salvador and some of the, you know, some of the life changing impacts that, you know, people the citizens there are able to utilize from know, remittance payments to, you know, ecommerce or sorry, physical commerce themselves.
1192
01:36:17.005 --> 01:36:17.905
Yeah. I mean,
1193
01:36:18.284 --> 01:36:21.885
that whole story is, yeah, very personal for me because, yeah, it was
1194
01:36:22.364 --> 01:36:29.340
on the inside, this whole thing was happening. But for me, the fact that, you know, one of us, a Bitcoiner like Jack,
1195
01:36:29.800 --> 01:36:31.740
can go to El Salvador and
1196
01:36:32.324 --> 01:36:32.824
practically
1197
01:36:33.284 --> 01:36:36.185
change the change the trajectory of
1198
01:36:36.885 --> 01:36:39.385
history of a country and get them to
1199
01:36:39.685 --> 01:36:41.065
adopt that first.
1200
01:36:42.810 --> 01:36:46.810
Bitcoin as a link legal tender bill is is just amazing. And,
1201
01:36:47.930 --> 01:36:50.190
as Andre is saying, with scratching the surface,
1202
01:36:50.570 --> 01:36:51.070
leave.
1203
01:36:52.395 --> 01:36:54.095
Yeah. That's just 1st domino.
1204
01:36:55.835 --> 01:37:02.760
And for us that hey. Yeah. For us that have been in midpoint for so long, it's just something that we have been expecting because
1205
01:37:03.460 --> 01:37:05.560
state and money will be separated.
1206
01:37:05.940 --> 01:37:06.440
Yeah.
1207
01:37:07.460 --> 01:37:07.960
Yeah.
1208
01:37:10.065 --> 01:37:10.805
I think
1209
01:37:11.905 --> 01:37:14.165
faith and money will be separated,
1210
01:37:14.545 --> 01:37:14.945
and,
1211
01:37:15.665 --> 01:37:16.965
we are going to
1212
01:37:17.350 --> 01:37:21.610
fix the money, fix the world. Because when you see, for example, what happened
1213
01:37:21.910 --> 01:37:23.449
in Canada, I mean, it's
1214
01:37:24.150 --> 01:37:26.010
just crazy that you have
1215
01:37:26.485 --> 01:37:26.985
people
1216
01:37:27.525 --> 01:37:36.710
honking, people donating for people to honk, and it's not even that people that are honking are getting their bank account shut down. It's people that send $20
1217
01:37:37.330 --> 01:37:38.470
to them. And
1218
01:37:39.810 --> 01:37:40.310
so
1219
01:37:41.125 --> 01:37:47.065
I understand politicians and they are trying to, you know, keep keep things running, keep
1220
01:37:47.900 --> 01:37:55.360
fulfilling promises that got them elected, but I mean, come on. You know? At at certain point, you need to realize you are
1221
01:37:55.764 --> 01:37:58.505
not going to make it and look to solutions,
1222
01:37:59.525 --> 01:38:02.744
not just invent problems to stay in power. And
1223
01:38:03.890 --> 01:38:06.630
I would even expand that beyond countries like
1224
01:38:07.650 --> 01:38:08.230
it's even
1225
01:38:08.610 --> 01:38:11.830
when you see what's happening with Bitcoin and so many people
1226
01:38:13.635 --> 01:38:16.935
trying to control Bitcoin and narrative around Bitcoin.
1227
01:38:17.395 --> 01:38:20.215
What they need to hear and understand is that
1228
01:38:21.239 --> 01:38:23.420
you know, Bitcoin doesn't need you,
1229
01:38:23.800 --> 01:38:24.860
you need Bitcoin.
1230
01:38:25.480 --> 01:38:26.380
So yeah.
1231
01:38:27.080 --> 01:38:27.580
Right.
1232
01:38:29.574 --> 01:38:30.635
Mister Wonderful,
1233
01:38:30.935 --> 01:38:31.915
he is GBS.
1234
01:38:32.295 --> 01:38:38.670
I mean, man, we don't need you. You know? We if if we need, we we have Peter Thiel. Like, thank you very much.
1235
01:38:39.210 --> 01:38:40.270
So yeah.
1236
01:38:42.330 --> 01:38:43.070
Thank you.
1237
01:38:43.530 --> 01:38:44.030
And
1238
01:38:46.205 --> 01:38:49.824
I look at math always and go with, you know,
1239
01:38:50.685 --> 01:38:52.145
stay humble. So
1240
01:38:52.719 --> 01:38:55.060
I'll, yeah, I'll stay up. I'll stand there.
1241
01:38:56.639 --> 01:38:57.119
Awesome.
1242
01:38:57.440 --> 01:38:58.980
I'd like to kinda get into,
1243
01:38:59.360 --> 01:39:15.890
the little bit of the different roles that we have here on on this panel today, you know, we have, you know, we have custodians, like, servicing Lightning payments on behalf of users. We have open source tooling for self sovereign individuals to actually, you know, do Lightning payments on their own, both sending and receiving.
1244
01:39:16.190 --> 01:39:20.765
And we have a VC here, Elise, you know, investing in some of the, you know, most groundbreaking,
1245
01:39:21.705 --> 01:39:33.710
companies, you know, moving at lightning speed, and, like, a technological level that, like, we really don't see so much in in the real world. So I'd love to kind of just hear the the importance of, like, each of your roles that you have,
1246
01:39:34.330 --> 01:39:47.320
in lightning here and and, you know, even maybe the dichotomy between, you know, custodians and and open source development. So like, Bin, do you wanna like kind of talk about like some of the open source tooling that, like, you have created on, with Alan Bits? Yeah. So,
1247
01:39:47.719 --> 01:39:54.300
with Alan Bits, you can, you know, run it just for yourself, or you can run it for your friends or family, or you can run it for a business,
1248
01:39:54.715 --> 01:40:00.815
or you can run it for the whole world if you want to and be custodian for other people's funds, then obviously you'll have to tackle the regulatory stuff and whatever else.
1249
01:40:01.810 --> 01:40:02.310
So
1250
01:40:02.930 --> 01:40:17.375
I I'm not I think within Bitcoin, you know, not your node, not your rules, like, you should run your own node. We need to make that as easy as possible, and we are making it as easy possible with all the great projects like Umbrella 1 and RaspiBlitz and and and then my nodes and all these sorts of things.
1251
01:40:18.700 --> 01:40:19.200
But
1252
01:40:19.820 --> 01:40:22.800
it's also okay to appreciate that some people
1253
01:40:23.100 --> 01:40:23.600
will,
1254
01:40:24.300 --> 01:40:25.440
outsource that security,
1255
01:40:26.219 --> 01:40:28.445
to somebody who they quote unquote trust,
1256
01:40:29.005 --> 01:40:32.784
And hopefully, that, you know, the amount of money which they would leave on that service would be minimal,
1257
01:40:33.485 --> 01:40:33.985
and
1258
01:40:34.525 --> 01:40:38.330
it could just be like a sort of scrub service or semi custodial
1259
01:40:38.950 --> 01:40:41.110
bit relay Bitcoin service, where Bitcoin
1260
01:40:41.670 --> 01:40:42.730
so say if you've got
1261
01:40:43.895 --> 01:40:51.435
someone offering a custodial service and then they're receiving lightning payments, then to have it just loop out to on chain when the amount gets too big,
1262
01:40:52.140 --> 01:40:58.480
then as a custodial service, maybe your security threat model is that you're just leaving, you know, a couple of 100 quid on this service.
1263
01:40:59.175 --> 01:41:10.560
And then it's like, okay, well maybe for what I'm using it for, then maybe I don't need to promote, oh, no, it's easier not to, and some people will do that. So we need to we need to be aware of them doing that, and then we need to build for them,
1264
01:41:11.100 --> 01:41:16.160
but do it in such a way that we can encourage them to then run it themselves, so it's not hard to run themselves.
1265
01:41:17.405 --> 01:41:20.465
So yeah, you have, like, you know, custodial and you have non custodial,
1266
01:41:21.005 --> 01:41:24.865
and I think a lot of companies, like, you know, like Galloway, like Allen Bits, like, we're exploring
1267
01:41:25.260 --> 01:41:44.114
stuff in the middle. You know, what's in the middle? Is it community banking? Is it sort of scrub services? Could we get, you know, all that liquidity which is sloshing around in people's lightning wallets? Could we pool it together, and then could those pools be used as a funding source for custodial service services? So, you know, in a protocol y way, it's, you know, the funds aren't being held by the service provider,
1268
01:41:45.200 --> 01:41:55.015
and then there could be some potential yield for the people who allow allow their Lightning funds to be put into that pool. So I think there's some really interesting work on decentralizing custodianship
1269
01:41:55.395 --> 01:41:57.655
and and and that murky area in the middle.
1270
01:41:58.435 --> 01:42:00.695
So my I think that's really important because
1271
01:42:01.270 --> 01:42:04.570
actually one of the most important pieces of Bitcoin and Lightning,
1272
01:42:05.190 --> 01:42:06.170
is the optionality.
1273
01:42:06.550 --> 01:42:24.710
Right? It's a permissionless system. You can choose how deep in the stack you go. So if you're, you know, a self sovereign individual and you want to own the entire stack and you want to be your own bank, you have that capability. You know, you can run a Bitcoin Core Node, you can run a Lightning Node, you can have channel you can do literally everything yourself.
1274
01:42:25.095 --> 01:42:39.730
I think it's a big ask to assume that each and every person in the world will eventually do that. I think the optionality is really, really important, and you having hybrid models, having custodial models, having non custodial models is one of the big value propositions of Bitcoin and Lightning.
1275
01:42:40.165 --> 01:43:07.970
You know, it's you serve your own needs, you get to serve your own needs. So, in a world where everything online and in real life can have a value attached to it, I think everyone will be involved in Bitcoin in one way or another, even if you're not running the software yourself. I think there are different use cases. You know, thinking from our side of the Zebedee side, if you're a giant games publisher, you likely don't want to run you know, your banking infrastructure yourself because of lots of regulatory
1276
01:43:08.430 --> 01:43:34.175
burdens, because of infrastructure costs and etcetera, so you're going to outsource that to a bigger custodian who's focusing on that. But if you're a general user or you're a community bank with, you know, you and your family want to have a node at home and you want to run that and manage that yourselves, you can do that, right? So this is completely different to traditional finance. You can't just get a banking license as a person and and and sort of begin being a bank yourself. Bitcoin allows for that optionality, gives you that permission,
1277
01:43:34.955 --> 01:43:36.655
permission listed in system, right,
1278
01:43:36.955 --> 01:43:49.054
and then you get to choose. If you are a sovereign individual in Bitcoin, you get to choose how far you go, how deep you go, how technical you go. Lots of people run their email servers, lots of people don't run their email services and they choose to use Gmail. Right? Lots of
1279
01:43:49.355 --> 01:44:10.275
people use accounts like Zebedee and Stripe, and lots of people will run their own Lightning nodes at home. So the optionality to me is a really important piece and it's how we're going to grow to 1,000,000 and billions of Lightning users instead of every single person having their own Node at home as an essential piece of it. Lightning is the future and we need to make it approachable and reachable to all types of users, whether you're technical or not. Right?
1280
01:44:10.655 --> 01:44:11.155
Yeah.
1281
01:44:14.710 --> 01:44:19.610
Yeah. If you'll just add to that to someone that is working on both custodial solution,
1282
01:44:20.070 --> 01:44:20.550
with,
1283
01:44:21.275 --> 01:44:24.415
strike and then non custodial with BTC based server.
1284
01:44:24.954 --> 01:44:33.870
I, often get messages of my BTC based server instance, there is this problem, that problem. So, yeah, it is about us creating the tools
1285
01:44:34.250 --> 01:44:35.070
that facilitate
1286
01:44:35.770 --> 01:44:36.430
the future.
1287
01:44:37.530 --> 01:44:38.030
And
1288
01:44:39.415 --> 01:44:40.075
to me,
1289
01:44:40.455 --> 01:44:44.875
one of the most natural use cases for Lightning is that,
1290
01:44:45.975 --> 01:44:46.875
big custodians,
1291
01:44:47.950 --> 01:44:49.170
specifically exchanges.
1292
01:44:49.790 --> 01:44:53.090
So big shout out to Jesse and Pierre
1293
01:44:53.470 --> 01:44:59.125
for Kraken Yeah. Integrating Lightning Network. Yeah. It's running large. Yeah. Because
1294
01:45:00.865 --> 01:45:02.245
for me, when we have
1295
01:45:02.945 --> 01:45:05.525
big exchanges like that, it's it's such a
1296
01:45:06.099 --> 01:45:13.880
natural use case because you don't even need to deposit in exchange and get exchange hacked, but rather, you will have your funds in channel.
1297
01:45:14.195 --> 01:45:17.255
And yeah, it can rebalance with your dirty fiat.
1298
01:45:17.715 --> 01:45:18.215
So
1299
01:45:18.995 --> 01:45:20.615
yeah, it's all about providing
1300
01:45:21.330 --> 01:45:24.150
a range of solutions and then people can pick and choose.
1301
01:45:25.810 --> 01:45:31.465
And that's the original, you know, with Lightning, that's what Satoshi's original vision, wasn't it? It was, Antigox and the unidirectional
1302
01:45:31.844 --> 01:45:38.040
payment channel. So it's really nice to see the exchange is actually, you know, implementing it. Yeah. Direct channel with Mt. Gox.
1303
01:45:38.440 --> 01:45:40.940
Yeah. They could do so you could do high speed, high frequency,
1304
01:45:41.880 --> 01:45:43.900
likes to the the funds. Yeah.
1305
01:45:45.535 --> 01:45:50.275
Yeah. At least on the VC side of things, like, how, like, how how do you see your role in the lightning space?
1306
01:45:50.895 --> 01:45:53.075
So our role is to be
1307
01:45:53.430 --> 01:45:59.610
a collaborator and resource provider, and I think of it as a service provider for the founders that we work with.
1308
01:45:59.990 --> 01:46:07.415
And then if we're doing our job well, it helps accelerate what the founder would have done without us. That's the goal.
1309
01:46:08.450 --> 01:46:11.430
I also, though, think of us as a way to organize
1310
01:46:11.810 --> 01:46:13.430
capital to provide resources
1311
01:46:13.810 --> 01:46:14.630
for growth,
1312
01:46:15.010 --> 01:46:21.075
in the field, which is more challenging in Bitcoin and Lightning than in Altcoin spaces, for example.
1313
01:46:21.695 --> 01:46:25.310
And so it's important for us to be able to talk to,
1314
01:46:25.690 --> 01:46:32.590
you know, Bitcoin OGs that has stacked a lot of Bitcoin about why they should contribute back to the innovation ecosystem,
1315
01:46:33.215 --> 01:46:36.755
but then also to folks that might not get Bitcoin yet about,
1316
01:46:37.375 --> 01:46:38.435
why they should care.
1317
01:46:38.735 --> 01:46:42.835
And on that second group, one of the catalysts for people's curiosity
1318
01:46:51.500 --> 01:46:54.285
spoke spoke around this earlier, is that because
1319
01:46:54.825 --> 01:46:56.045
it's more flexible,
1320
01:46:56.345 --> 01:47:01.940
it can meet people in communities where they're at. At. So for instance, what Zebedee is doing for gamers,
1321
01:47:02.880 --> 01:47:08.875
is banking them, basically, in a way that makes sense for the population and can't be done with traditional financial tools.
1322
01:47:09.255 --> 01:47:13.355
But it can also do that in emerging markets or for lower socioeconomic
1323
01:47:13.655 --> 01:47:15.515
status populations where traditional
1324
01:47:16.120 --> 01:47:19.820
finance can't serve them either. And so it's been,
1325
01:47:20.520 --> 01:47:22.460
so that's our job, is to recognize
1326
01:47:22.840 --> 01:47:25.100
the opportunities that the protocols present
1327
01:47:25.525 --> 01:47:33.145
to create new utility and then find the founders that are going to be able to to execute and provide for these populations.
1328
01:47:34.680 --> 01:47:37.420
Awesome. Amazing. So we got about 5 minutes left.
1329
01:47:37.960 --> 01:47:39.900
I did want to kinda get into,
1330
01:47:40.520 --> 01:47:42.515
you know, almost the flip side of things.
1331
01:47:43.215 --> 01:47:45.795
What if, what if the Lightning Network is not,
1332
01:47:46.095 --> 01:48:06.645
the future of commerce here? Like, what if what if, Lightning Network ends up being used in other use cases? Like, is Lightning good enough the way it is? Do we need to, like, like, what needs to progress to move it to the next to the next level? It is, from there. Like, do we need additional payment protocols to be able things like Bolt 12 to be able to service some of these use cases?
1333
01:48:07.344 --> 01:48:12.179
Are there gonna be alternative, like, subnetworks within the Lightning space or even, like, additional,
1334
01:48:12.960 --> 01:48:27.590
you know, layer 2 or layer 3 solutions on top of Bitcoin? So, you know, as kinda like final thoughts here, like, what do you guys see as as Lightning as the future of commerce? Is it the future of commerce? Yeah. I can. We had a really good talk in the backstage about it. Maybe
1335
01:48:28.050 --> 01:48:32.550
me and Andre were talking about if you have additional hubs it's not direct channel
1336
01:48:33.225 --> 01:48:35.805
success of payments is 77. Yeah,
1337
01:48:36.185 --> 01:48:42.045
77. And then it goes down from there. It's like but yeah, maybe maybe you can expand on that then, Al. Yeah.
1338
01:48:42.560 --> 01:48:46.900
I think, you know, to me, one of the important pieces of of Lightning is interoperability,
1339
01:48:47.280 --> 01:48:58.235
right, in Bitcoin. Layer 1, we all agree on everything. It's a consensus based layer. Layer 2, we have some agreements, but like we said before, different participants can have separate agreements and and still transact value.
1340
01:48:58.710 --> 01:49:05.050
As we Stack the Layers, as we continue building the Bitcoin Stack, I think it's really important to maintain that interoperability,
1341
01:49:05.965 --> 01:49:10.225
as with things with LNURL, Lightning address, and so forth, and I think
1342
01:49:11.645 --> 01:49:12.145
if
1343
01:49:12.525 --> 01:49:24.905
we reach a scenario where certain companies are doing this, other teams are doing that, some certain people are doing this, and they can't speak to each other, you lose a very vital piece of Bitcoin, which is the ability to send money to anyone, anywhere.
1344
01:49:26.165 --> 01:49:26.665
So
1345
01:49:27.284 --> 01:49:40.614
we're working very hard for it to be the future, but there's also lots of business interests for companies, there's also incentives, there are different for certain teams. So it would be a shame if we were to split and Lightning becomes separate things to each team.
1346
01:49:40.994 --> 01:49:54.600
And that's when, in my opinion, Lightning could come to not be the holy grail that we all want it to be. So I think it's it's a matter of communication, but it's a it's a very tough problem. Right? How do we engage as community members, as company
1347
01:49:55.105 --> 01:50:02.750
companies to to agree on standards that are being built as as we're building them? Right? And Bitcoin and Lightning are are sort of
1348
01:50:03.230 --> 01:50:06.690
standardized now, but what about the rest of the things that are being built on top of it?
1349
01:50:06.990 --> 01:50:10.270
So I I think that's one of the the big interesting points. Yeah. Yeah. It's
1350
01:50:11.115 --> 01:50:13.135
when you look at the way that lightning specification
1351
01:50:13.515 --> 01:50:25.320
developed which was really good with like bolt 1, bolt 2, like bolt all the way to bolt 11 and then from there, we've expanded. And now we are at this point where will we sit down and talk about specifications,
1352
01:50:25.620 --> 01:50:28.440
improve them, or, like, what will be the path forward?
1353
01:50:29.415 --> 01:50:30.715
Because for me,
1354
01:50:31.574 --> 01:50:36.390
you know, maybe maybe payments is not the future of lightning. Maybe tokens are.
1355
01:50:37.190 --> 01:50:37.770
You know?
1356
01:50:38.150 --> 01:50:38.810
I offer
1357
01:50:39.110 --> 01:50:40.330
that thought to you.
1358
01:50:41.590 --> 01:50:45.930
What I am really excited about though is alternative layers too. So
1359
01:50:46.925 --> 01:50:47.425
CoinPool
1360
01:50:47.804 --> 01:50:50.065
as a proposal has came out.
1361
01:50:50.685 --> 01:51:02.415
And, I see that in future, there will be a lot of development there because there are such such natural use cases for that. As someone working on BTC pay server, it's like, if you
1362
01:51:02.875 --> 01:51:05.135
just overpay your merchant now
1363
01:51:05.515 --> 01:51:07.855
you're masking the amount that you pay to merchant
1364
01:51:08.155 --> 01:51:14.690
and only merchant knows it, can blank it out. And whatever you overpay can now become a part of the pool.
1365
01:51:14.990 --> 01:51:17.650
So sort of like what samurai is doing.
1366
01:51:19.195 --> 01:51:23.375
But let's see. Yeah. Let's see. And, invitation. If there are any more
1367
01:51:23.755 --> 01:51:25.935
NIMs like me, shadowy supercoders,
1368
01:51:26.800 --> 01:51:30.659
come to b t c pace server matter most, then let's talk about coin.
1369
01:51:32.640 --> 01:51:35.140
So a lot of what I think can help advance
1370
01:51:35.575 --> 01:51:39.835
Lightning for payments and make Lightning payments more reliable,
1371
01:51:40.935 --> 01:51:47.659
including in when there's multiple hops in the payment is being built now. So Lightning is still early. There's an opportunity
1372
01:51:47.960 --> 01:51:48.460
for,
1373
01:51:48.920 --> 01:51:53.420
that many companies have described, for instance, voltage recently, I think, at this conference.
1374
01:51:53.825 --> 01:51:54.645
There's an opportunity
1375
01:51:55.425 --> 01:51:56.165
to be more,
1376
01:51:56.945 --> 01:52:00.085
efficient in how you manage your nodes and channels,
1377
01:52:00.545 --> 01:52:07.360
and businesses have the same opportunity. And so I think it's one of the strengths about the Bitcoin community is that we're really,
1378
01:52:07.920 --> 01:52:24.740
self evaluative. So we're hard we're hard on ourselves. We critique ourselves. And I think that makes us much stronger, but we also have to remember that it's just very early. And so some of the picks and shovels that need to be built for lightning to be the future of commerce are being built today. We're trying to fund them.
1379
01:52:25.120 --> 01:52:36.324
One of the things that makes me most bullish, though, about Lightning for the future of commerce is to see the sort of feedback loop that companies like Zebedee or Strike,
1380
01:52:37.040 --> 01:52:43.540
Ibex Mercado, Lightning Labs have been using in terms of the adoption and infrastructure cycle.
1381
01:52:44.055 --> 01:52:46.795
And so, for instance, we saw in El Salvador,
1382
01:52:47.735 --> 01:52:51.435
a real, like, love and appreciation for lightning the protocol.
1383
01:52:51.830 --> 01:52:54.810
And then we saw perhaps some difficulty or challenge,
1384
01:52:55.590 --> 01:52:58.570
for emerging markets where households might have,
1385
01:52:59.325 --> 01:53:06.065
you know, a a one ratio of how much they make and how much they need to spend each month, it's harder to tolerate Bitcoin's volatility,
1386
01:53:07.400 --> 01:53:18.575
at least now before we're in a a you know, before everything's denominated in Bitcoin. And so as part of that feedback loop, we see companies thinking about how to offer the protocol without exposing
1387
01:53:19.215 --> 01:53:24.035
forcing exposure to Bitcoin's volatility. And so those sorts of quick iterative,
1388
01:53:24.719 --> 01:53:26.739
loops based on feedback from adoption
1389
01:53:27.119 --> 01:53:32.020
will, I I think, position Lightning to be in a really good place to dominate commerce in the future.
1390
01:53:32.455 --> 01:53:33.655
Yeah. I mean, I I think that,
1391
01:53:34.295 --> 01:53:40.715
sorry. I think that, Lightning any money, medium and exchange money, which we're gonna be using in the future, will be built using Lightning.
1392
01:53:41.210 --> 01:53:46.190
Currently, we're just at the stage where it's, you know, messy and there's all this, you know, it's
1393
01:53:46.490 --> 01:53:50.030
the free and open source way, isn't it? You're making the sausage in public,
1394
01:53:50.534 --> 01:53:59.034
and everyone can see all the ingredients which go into it, and it's messy. It's not like a closed source system. So it seems very chaotic, and it seems like things are breaking, aren't working, and then you have payment failures.
1395
01:54:00.110 --> 01:54:01.010
But, you know,
1396
01:54:01.469 --> 01:54:10.475
the reason people have payment failures is because they haven't balanced their channels properly, and now there's always great services which are exploring how to do that in a more automated way and, you know, solutions
1397
01:54:10.855 --> 01:54:11.995
for fixing that.
1398
01:54:12.935 --> 01:54:23.420
So, yeah, like and this is what I was saying before about the, you know, having real world use gives you all that great feedback, like in El Salvador. The thing which is obvious for anyone who went there was the payment rails, fantastic.
1399
01:54:23.735 --> 01:54:27.034
Medium of exchange sucks because you got the volatility. It's the volatility of Bitcoin,
1400
01:54:27.655 --> 01:54:39.889
and then we know one day that Bitcoin will have enough liquidity, so it won't be volatile, but then how will it get there unless people are using it as a stable medium of exchange? So the idea of these stable coins, which can bring in Bitcoin liquidity,
1401
01:54:40.590 --> 01:54:41.810
which we can use temporarily
1402
01:54:42.545 --> 01:54:48.165
and so we get to that, you know, mass where, the Bitcoin price just can't move because it's so incredibly liquid.
1403
01:54:48.625 --> 01:54:57.220
I think that's the inevitable kind of next step for Bitcoin. It's very exciting. Yeah. Yeah. Well, I wanna give, everyone a round of applause for these amazing panelists.
1404
01:54:57.840 --> 01:54:59.005
Thank you guys so much.
1405
01:55:50.679 --> 01:55:51.420
What's up?
1406
01:55:52.920 --> 01:55:56.140
What's up? Is my mic on? Hello? Hello. Hello?
1407
01:55:56.565 --> 01:55:58.665
Hello? Can you hear me? Testing 12.
1408
01:56:00.325 --> 01:56:04.430
Testing 12. Here we go. Line up over here. Oh, I can see us.
1409
01:56:05.630 --> 01:56:10.290
Hello? Testing 12? Test testing 1. Yeah. What's up? Can you guys hear me okay?
1410
01:56:11.995 --> 01:56:18.315
Cool. So this is the mempools panel. My name is Wiz. I'm the co founder of the mempool open source project and,
1411
01:56:18.795 --> 01:56:20.255
operator of the mempool.space
1412
01:56:21.360 --> 01:56:22.500
block explorer website.
1413
01:56:22.880 --> 01:56:24.900
And, this is the mempool panel where we're gonna
1414
01:56:25.280 --> 01:56:28.340
bore you guys to death. We'll blab on for hours about the mempool.
1415
01:56:29.625 --> 01:56:37.325
These are some really cool shadowy supercoder, cypherpunk people. We're very fortunate to have here today. Why don't you introduce yourself?
1416
01:56:38.340 --> 01:56:41.060
Yeah. Thanks. My name is Serhii Koeppler. I'm the,
1417
01:56:41.460 --> 01:56:44.119
founder and CEO of Petri Phil. Yeah.
1418
01:56:44.420 --> 01:56:47.719
Many of you probably know we do we let you buy anything you want with.
1419
01:56:51.114 --> 01:56:52.735
Cool. I think I'm okay.
1420
01:56:53.435 --> 01:56:54.415
My name is Gloria.
1421
01:56:54.955 --> 01:56:56.895
I work on Bitcoin Core,
1422
01:56:57.380 --> 01:56:58.600
mostly in the mempool
1423
01:56:59.380 --> 01:56:59.880
codebase
1424
01:57:00.260 --> 01:57:04.680
and surrounding areas such as mempool validation, transaction relay, and mining.
1425
01:57:06.485 --> 01:57:15.284
When I say as a preface. When I say the mempool, people often on Twitter say I don't know what I'm talking about. I mean the mempool as in the code base area, just just to say
1426
01:57:16.870 --> 01:57:22.490
And I'm founded by Brink, which is a nonprofit dedicated to Bitcoin research and development.
1427
01:57:24.435 --> 01:57:38.920
Hi. I'm Mersh. When I talk about the mempool, I mean, the transactions that are unconfirmed and are shared between all the different nodes that run and have their own unique perspective on the mempool which just overlaps largely.
1428
01:57:39.300 --> 01:57:42.360
So the mempool is an abstract concept that just
1429
01:57:42.925 --> 01:57:43.985
treats this overlap.
1430
01:57:45.485 --> 01:57:51.265
And I I used to stare a lot more at the mempool when I was at BIPCO as a back end
1431
01:57:52.560 --> 01:57:53.620
coins team member,
1432
01:57:54.320 --> 01:58:02.020
because we had so many customers that would get stuck transactions or just needed advice when and how they should send their transactions.
1433
01:58:03.505 --> 01:58:05.684
Now I'm at Chaincode Labs
1434
01:58:06.224 --> 01:58:08.804
and while I'm still interested in mempool and,
1435
01:58:09.264 --> 01:58:12.320
yeah, I sometimes do the mempool weather report.
1436
01:58:13.020 --> 01:58:16.239
Yeah. We love those mempool, weather reports from merch.
1437
01:58:16.699 --> 01:58:21.985
You haven't had you haven't done any while though. Maybe we maybe if we ask real nice, they'll do one for us today.
1438
01:58:23.165 --> 01:58:25.105
But let's start with the the basics.
1439
01:58:25.645 --> 01:58:27.345
Sergei, do you do you wanna like
1440
01:58:27.679 --> 01:58:29.699
just break it down for everyone who's
1441
01:58:30.159 --> 01:58:32.100
not already familiar? What is a mempool?
1442
01:58:33.199 --> 01:58:35.060
Why do Bitcoin nodes have them?
1443
01:58:35.775 --> 01:58:37.395
How do they work? Why are we so
1444
01:58:37.695 --> 01:58:38.915
interested in the mempools?
1445
01:58:40.335 --> 01:58:42.435
There's a lot there. Yeah. I mean,
1446
01:58:44.190 --> 01:58:49.969
the basic thing is that that, you know, when you send the Bitcoin transaction, it doesn't go right into a block. Right?
1447
01:58:51.515 --> 01:58:54.495
Where does it go? It goes into the mempool. So the mempool is,
1448
01:58:54.875 --> 01:58:57.935
is the the pool of transactions that are, waiting
1449
01:58:58.315 --> 01:59:00.415
to be performed into a block.
1450
01:59:01.020 --> 01:59:05.360
A Bitcoin node will receive a transaction. We will check if it's valid, put it in the mempool,
1451
01:59:05.739 --> 01:59:09.895
and we will have written this stuff, and they'll pass it around to all the other Bitcoin,
1452
01:59:10.595 --> 01:59:12.435
nodes that it knows of. So there's,
1453
01:59:13.475 --> 01:59:19.409
each has its own perspective, but there's also some level of shared knowledge of what are the transactions that are
1454
01:59:20.030 --> 01:59:21.090
waiting to be
1455
01:59:21.710 --> 01:59:22.210
confirmed.
1456
01:59:22.670 --> 01:59:24.130
And and so,
1457
01:59:24.485 --> 01:59:26.745
I mean, from my perspective as
1458
01:59:30.085 --> 01:59:32.265
CEO technical CEO of
1459
01:59:32.725 --> 01:59:33.740
a company that makes
1460
01:59:34.460 --> 01:59:38.000
many Bitcoin transactions and have customers making Bitcoin transactions to us.
1461
01:59:38.300 --> 01:59:39.840
Especially back in 2017,
1462
01:59:40.940 --> 01:59:43.440
when the transaction fees were really high, it became,
1463
01:59:44.065 --> 01:59:47.605
I mean, really financially important because we were spending 1,000
1464
01:59:48.065 --> 01:59:49.925
and tens of 1,000 even on dollars
1465
01:59:50.225 --> 01:59:52.805
on transaction fees almost on a daily basis.
1466
01:59:53.230 --> 02:00:03.705
And so it created a strong incentive to, like, keep an eye, right, because the most important thing is that Demandpool is sorted by the fee rates, right? So that transaction that has a higher transaction fee
1467
02:00:04.085 --> 02:00:07.705
will be sorted higher, and it's going to be prioritized first by the miners,
1468
02:00:08.085 --> 02:00:11.760
which are then working based on you know, financial incentives.
1469
02:00:12.460 --> 02:00:15.400
Right? But then it becomes important to,
1470
02:00:15.780 --> 02:00:24.295
you know, to set a fee that is just high enough, but not too high because then you're wasting money, right, but not too low because then the transaction is not going to go through
1471
02:00:24.595 --> 02:00:27.140
maybe ever or maybe in a long time, right? And
1472
02:00:27.440 --> 02:00:28.660
so fine tuning that
1473
02:00:30.320 --> 02:00:35.380
is super important. And I mean, this is something where that's gotten infinitely better in the past years,
1474
02:00:36.495 --> 02:00:40.195
But that's kind of how my interest got sparked into it.
1475
02:00:40.575 --> 02:00:50.070
And I still do as a habit, even though the mempool isn't as crazy as it used to be. I I still watch it. I I show I was showing the people that I have it on my phone,
1476
02:00:50.450 --> 02:00:52.630
yeah, you know, in my, in my Safari.
1477
02:00:54.525 --> 02:01:01.425
Yeah, just to keep an eye on, like because you can see, you know, you can see a lot of stuff in the main poll of, like, what is going on? Who's making the transactions?
1478
02:01:02.350 --> 02:01:17.145
What are they doing? Where are they going? You know? You you learn a lot of stuff. Yeah. If you're watching it, I don't think that Yeah. That that's a good way to put it. It's kinda like the transaction queue of the Bitcoin network where whenever you use Bitcoin, it just goes into there first, then it's this very interesting,
1479
02:01:17.685 --> 02:01:18.185
area
1480
02:01:18.750 --> 02:01:20.930
to monitor and and visualize. Right?
1481
02:01:21.470 --> 02:01:27.570
But one thing you mentioned that was really interesting is, how the high the transactions fees got last year.
1482
02:01:29.025 --> 02:01:31.205
Actually, this is a good question for Merck.
1483
02:01:31.665 --> 02:01:33.585
And maybe I think we have a slide for this,
1484
02:01:34.065 --> 02:01:36.565
the history of the last, last year.
1485
02:01:36.960 --> 02:01:38.800
Could you guys show that first slide? It's,
1486
02:01:39.440 --> 02:01:43.300
it's basically the, the BEM pool chart of the last 3 years.
1487
02:01:44.800 --> 02:02:01.470
Mersh, do you wanna give us your nice weather report? What's what's going on in this chart? Well, more of an historical weather overview. So in in the last year, we had the interesting situation that from mid December, 15th December until 2nd June, the MEM pool never fully cleared.
1488
02:02:01.930 --> 02:02:07.935
So there was always at least one block worth of transactions waiting to be confirmed. And,
1489
02:02:08.635 --> 02:02:10.415
for some time of that, even
1490
02:02:10.795 --> 02:02:13.135
the default mempool limit overflowed.
1491
02:02:13.630 --> 02:02:16.690
I think we are gonna touch on that a little later maybe. And,
1492
02:02:17.630 --> 02:02:21.170
so the colors that you see here, hopefully yes.
1493
02:02:23.075 --> 02:02:29.575
So the the lowest bar is, you see color bands here. Right? And the color bands are fee rates,
1494
02:02:30.035 --> 02:02:30.430
and
1495
02:02:30.910 --> 02:02:36.050
the size of the bands indicate how much data is waiting to be included in blocks.
1496
02:02:36.590 --> 02:02:39.490
So at the bottom, you have this pinkish tone
1497
02:02:40.245 --> 02:02:41.205
there. That's,
1498
02:02:41.685 --> 02:02:48.345
just over default min relay fee, which is 1 satoshi per v byte of transaction data.
1499
02:02:48.840 --> 02:02:53.320
And then it I think yellow goes up to, like, 30, 40, or even
1500
02:02:54.520 --> 02:02:55.020
100.
1501
02:02:55.480 --> 02:02:57.500
Yeah. Yeah. A 100. So,
1502
02:02:59.094 --> 02:03:05.675
generally, the the mempool is just a visualize or this this chart we're looking here at here is a visualization
1503
02:03:06.135 --> 02:03:06.635
of
1504
02:03:07.119 --> 02:03:10.659
the waiting queue of payment promises
1505
02:03:11.040 --> 02:03:14.099
to be turned into payments by being included in blocks.
1506
02:03:14.715 --> 02:03:20.255
Yeah. It was, it was pretty crazy last year. I think it was, around December of, I guess, 2020
1507
02:03:21.970 --> 02:03:24.230
when we saw the fees start to rise
1508
02:03:24.850 --> 02:03:34.645
and the mempool was just congested all the time until about the Miami conference last year. Right, was right around when it when it and that during that whole time, it was just totally
1509
02:03:35.345 --> 02:03:41.880
congested. And you had sometimes you pay, like, as much as, like, 300 sats per vbyte just to get into the next block, like, 20 US
1510
02:03:42.180 --> 02:03:45.080
dollars just to do an ordinary Bitcoin transaction. It was really
1511
02:03:47.735 --> 02:03:53.114
a unique time in in Bitcoin's history, I think. We hadn't really seen that kind of sustained fee market
1512
02:03:54.140 --> 02:03:54.880
really before.
1513
02:03:55.260 --> 02:03:57.199
And and just to point out sorry.
1514
02:03:57.820 --> 02:04:02.880
There's a common expression. There is no the mempool. And likewise, this chart that you are seeing
1515
02:04:03.205 --> 02:04:09.304
is not a canonical view of, like, the mempool of the Bitcoin network. Right? This is just whizzes node,
1516
02:04:10.324 --> 02:04:14.309
which happens to have a very large maximum pool size. But,
1517
02:04:14.869 --> 02:04:18.730
I don't know if you guys can still see oh, if you could bring up the chart again. Sorry.
1518
02:04:19.349 --> 02:04:21.449
I think it goes up to like 400
1519
02:04:22.175 --> 02:04:23.635
it goes up to like 200,000,000
1520
02:04:24.735 --> 02:04:32.349
virtual bytes. But actually, the default mempool size is 300 megabytes, and a lot of that is taken up by metadata, 75%, in fact.
1521
02:04:32.650 --> 02:04:34.349
So most mempools,
1522
02:04:35.130 --> 02:04:35.949
like ordinary
1523
02:04:36.570 --> 02:04:39.550
non wiz nodes and not mining nodes on the network
1524
02:04:39.945 --> 02:04:41.885
are only keeping up to, like, 75,
1525
02:04:42.745 --> 02:04:47.325
1,000,000 virtual bytes worth of transactions. So they actually wouldn't even see the peak of those mountains.
1526
02:04:47.750 --> 02:04:50.409
But, of course, actually, they're keeping the top,
1527
02:04:51.190 --> 02:05:04.175
section of the fee rate, not the bottom. Yeah. And I think we have a slide of what that looks like. Can you go to the next one, to see what a normal nodes mempool looked like last year? Yeah. This is it. Corey, you wanna walk us through what we're looking at here? Yeah. So
1528
02:05:04.635 --> 02:05:06.574
in April or so, right,
1529
02:05:07.000 --> 02:05:09.739
they're purging all of the so okay.
1530
02:05:10.360 --> 02:05:11.260
Sergei mentioned
1531
02:05:11.719 --> 02:05:23.635
that we sort the mempool in transactions based on their fee rate. Right? And I guess the first thing I probably wanna mention is individual fee rate is not what matters. Ancestor package fee rate is what matters.
1532
02:05:24.280 --> 02:05:32.219
So in in Bitcoin, we have a unique transaction structure where it's made of inputs and outputs. Right? We all know what the UTXO
1533
02:05:33.085 --> 02:05:34.465
based structure is.
1534
02:05:36.125 --> 02:05:37.585
So you can have
1535
02:05:38.125 --> 02:05:40.945
you can have transactions dependent upon each other
1536
02:05:41.969 --> 02:05:46.070
inside of the mempool. So you can be spending trans you can be spending a UTXO
1537
02:05:46.449 --> 02:05:53.665
that doesn't exist in the blockchain, but it exists in a transaction that's still in the mempool. That makes sense. Right? Hopefully, everybody
1538
02:05:54.045 --> 02:05:59.200
understands that. But but how did the Bitcoin network change during this time of, consistently
1539
02:05:59.820 --> 02:06:05.200
high fee rate environment and and transactions getting purged? Like, what was the experience like for a normal
1540
02:06:05.535 --> 02:06:12.275
Bitcoin user at this time? Yeah. So I think if you had a 1 stop per v byte transaction that you that you broadcast
1541
02:06:12.710 --> 02:06:14.090
around April or so,
1542
02:06:14.710 --> 02:06:18.170
and as the mempool filled up, your transaction was probably
1543
02:06:18.550 --> 02:06:20.810
purged by most of the mempools,
1544
02:06:21.335 --> 02:06:24.534
most of the nodes' MEM pools. Right. Because there's this common,
1545
02:06:25.014 --> 02:06:25.514
belief
1546
02:06:26.054 --> 02:06:26.454
that,
1547
02:06:27.014 --> 02:06:31.114
you can just always send a transaction at 1 SAP per v byte,
1548
02:06:31.480 --> 02:06:33.900
fee rate and eventually it'll get confirmed.
1549
02:06:34.840 --> 02:06:35.240
But,
1550
02:06:35.800 --> 02:06:40.300
this is a common misconception, right? I mean if if the mempool is constantly full,
1551
02:06:40.715 --> 02:06:43.615
your low fee transactions will get purged out of the mempool.
1552
02:06:44.235 --> 02:06:45.935
And, There are other mempools,
1553
02:06:46.395 --> 02:06:49.295
that, have lots of True. And they do rebroadcast.
1554
02:06:49.720 --> 02:06:54.060
Like, when it goes down, you can see, in in if you bring up the chart again,
1555
02:06:54.520 --> 02:07:12.840
it's like Follow at us. Look at the chart. Down from the peak. You can see, like, over there, it's like some of the transactions are coming back, actually. Like, in the on the right half. You can see that the pink ones are, coming back up. Right? Right. So the red color may or may not be. The red color is, like, 1 sat per vbyte,
1556
02:07:13.255 --> 02:07:16.635
and that light blue color is, like, maybe, what, 20
1557
02:07:17.255 --> 02:07:18.075
ish? So
1558
02:07:19.175 --> 02:07:22.475
after all the higher fee rate transactions around 20,
1559
02:07:22.989 --> 02:07:24.850
SATs per vbyte got confirmed,
1560
02:07:25.630 --> 02:07:33.755
then you can see the the low fees of 1 SAT per vbyte started to get rebroadcasted in network. And So how did how did Bitrefill handle that,
1561
02:07:34.135 --> 02:07:36.475
during that time? Like, don't you guys
1562
02:07:38.055 --> 02:07:40.155
allow people to buy gift cards
1563
02:07:40.750 --> 02:07:54.985
with with, like, 0 Conf transactions in the mempool? Like, how did you guys, handle this? Well, this is this is exactly why we have to do that. Right? Because otherwise, the customer might be stuck forever and ever and have a horrible experience and support tickets and, confused refunds and exchange rate. There's
1564
02:08:04.165 --> 02:08:04.824
2017, when
1565
02:08:05.525 --> 02:08:06.344
this was
1566
02:08:06.804 --> 02:08:20.449
even worse, crazy than it was on the chart here, yeah, it was a kind of formative time for us. We were really, like, struggling. At the time, we were mainly doing low value phone refill transactions, you know, sort of, like, the typical, like, $5, $10 transactions.
1567
02:08:21.869 --> 02:08:22.369
And
1568
02:08:23.095 --> 02:08:25.995
I mean, we've done a lot of things. You know? We developed, like,
1569
02:08:26.375 --> 02:08:31.115
that we ourselves recommend a fee rate for the customer. Right? So we,
1570
02:08:31.815 --> 02:08:33.710
like, our web server monitors
1571
02:08:34.489 --> 02:08:36.110
this or our version of
1572
02:08:36.410 --> 02:08:41.710
this, and based on that, computes a recommendation that we give to the customer. And these days, most wallets
1573
02:08:42.065 --> 02:08:43.045
do that automatically,
1574
02:08:44.385 --> 02:08:45.765
but we also sort of, like,
1575
02:08:46.145 --> 02:08:53.900
make sure. But isn't that a huge risk for your business? I mean, if I go on your bidrefill site and buy an Amazon gift card for, like, $1,000
1576
02:08:54.840 --> 02:08:56.380
and send you a low fee
1577
02:08:57.000 --> 02:08:58.940
transaction That's RBF able.
1578
02:08:59.745 --> 02:09:05.285
Well, if if it's if it's RBF able, then we're not going to do the 0Conf. I mean, you're gonna have a bad user experience.
1579
02:09:05.985 --> 02:09:14.080
Yeah. But but if you do that, then presumably, you're you're savvy enough to to be able to fix the bad user experience yourself.
1580
02:09:15.340 --> 02:09:15.840
But,
1581
02:09:16.515 --> 02:09:23.575
I mean, the risk factor I mean, people think that Bitcoin transactions are, when they're unconfirmed, are are trivially reversible,
1582
02:09:24.100 --> 02:09:27.060
And and that's not true, at least not today.
1583
02:09:27.699 --> 02:09:32.280
You know, you need to collude with miners. Is that is would you guys agree with that statement?
1584
02:09:32.655 --> 02:09:37.635
I I think it has been shown that if you're willing to put in the effort you can very successfully
1585
02:09:40.110 --> 02:09:43.090
double spend transactions even after they've been broadcast,
1586
02:09:43.550 --> 02:09:47.010
but you do have to really put in some effort right now.
1587
02:09:47.465 --> 02:10:06.575
We don't accept just any transaction. Right? We we there there's there's a bit of magic going on where we're checking that and make sure. Right? So, I mean, the the low hanging fruit stuff that you have in mind, I mean, you know, doesn't the goal isn't to double spend it. The goal is just to trick us, right, into believing that we got the money where we didn't. Right. Right. That's the trick.
1588
02:10:07.035 --> 02:10:12.815
And I mean, we've been doing this for 7 years now. I think it has happened in 7 years,
1589
02:10:13.515 --> 02:10:14.335
1 or
1590
02:10:14.800 --> 02:10:29.655
2 times, and we do, like, you know, more than a 100,000 transactions every month. Right. You know? So, like and compare that to to credit cards where you, like, standard fraud rate is, like, 5%, and and then, you know, it's, like, a cost of doing business. So and here it's, like,
1591
02:10:30.035 --> 02:10:33.830
twice ever, and, like, it was because of bugs that we fixed.
1592
02:10:34.610 --> 02:10:50.250
I think it's still important to to distinguish, though. It's a little bit of a gentleman's agreement not to do it, and there's no tools to do it easily. There's a very few people that would have the knowledge and maybe connections to to reliably double spend.
1593
02:10:50.630 --> 02:10:57.094
And so, yeah, I I agree that from a business perspective and planning and and, like, risk factors,
1594
02:10:57.715 --> 02:10:58.695
you you can,
1595
02:10:59.315 --> 02:11:02.295
discard that risk for the most part. But,
1596
02:11:02.920 --> 02:11:03.420
fundamentally,
1597
02:11:04.280 --> 02:11:05.980
from how the mempool works,
1598
02:11:07.560 --> 02:11:13.945
there there are some policies that help with this, but it's not actually while a transaction is unconfirmed, it is unreliable.
1599
02:11:15.445 --> 02:11:20.825
And it just so happens that the policies and the the behavior of of our
1600
02:11:21.590 --> 02:11:22.090
society,
1601
02:11:23.030 --> 02:11:24.250
our Bitcoin society,
1602
02:11:25.429 --> 02:11:27.050
tends to to confirm
1603
02:11:27.510 --> 02:11:36.235
with with our needs in regard to to Well, no. There's thieves and hackers and crooks that use Bitcoin as well. So, you know, it's not just the the nice people at the Bitcoin conference.
1604
02:11:36.614 --> 02:11:49.255
Yeah. Fair. Yeah. Well, also, you you have customer accounts. Right? It's not that people are coming in No. No. Not customer. Well, we do, but that's not Okay. Related to that. Alright. Yeah. I'd love to continue talking about mempool attacks because the first time we met,
1605
02:11:50.035 --> 02:11:54.670
for me I mean, we all know that transaction relay in a distributed system is, like,
1606
02:11:55.070 --> 02:11:55.570
notoriously
1607
02:11:56.110 --> 02:11:56.610
unreliable.
1608
02:11:57.150 --> 02:11:57.890
And there's
1609
02:11:58.270 --> 02:12:09.065
I I think I know more than anyone that there's tons of attacks and it's a dangerous place. And so when I first met you and you said you accept 0Conf transactions, we had a very heated debate
1610
02:12:10.005 --> 02:12:12.920
about whether or not that's safe. And I I think,
1611
02:12:13.960 --> 02:12:14.460
you
1612
02:12:14.760 --> 02:12:17.020
you did manage to convince me that
1613
02:12:17.560 --> 02:12:18.780
for you at least,
1614
02:12:19.640 --> 02:12:20.140
it's
1615
02:12:20.600 --> 02:12:23.185
it's it's difficult to convince
1616
02:12:23.805 --> 02:12:27.344
the logic on top of your Bitcoin operation
1617
02:12:28.125 --> 02:12:37.369
that you are going to be double Yeah. It sounds like if you're gonna be sending a $1,000,000 to someone, you might wanna wait for 6 or 12 confirmations on the Bitcoin blockchain.
1618
02:12:37.995 --> 02:12:44.415
But for your particular threat model where you're selling gift cards of relatively small dom denominations,
1619
02:12:45.980 --> 02:12:49.760
you know, and mitigating the double spend risks. Like you said, no RBF.
1620
02:12:50.139 --> 02:12:52.865
They have to use a reasonably high fee rate,
1621
02:12:53.425 --> 02:12:54.325
etcetera, etcetera.
1622
02:12:55.185 --> 02:12:57.205
It sounds like you've figured out how to
1623
02:12:57.665 --> 02:13:06.010
manage this risk for your And I mean, let's be very, very, very clear here. I in no way say that you should rely on unconfirmed transactions. Yeah. Don't do that.
1624
02:13:06.550 --> 02:13:09.265
It's advanced level kung fu. You need to have
1625
02:13:09.745 --> 02:13:11.845
people that do it and spend
1626
02:13:12.305 --> 02:13:14.565
hours figuring it out, monitoring it,
1627
02:13:14.865 --> 02:13:21.390
evaluating, improving it, and so on. Something that you can do if you're a company and you have people working on this full time. It's not something
1628
02:13:21.770 --> 02:13:28.205
for the common man, right? But there's also I mean, it depends, if you're like, if your buddy is paying you back $10
1629
02:13:28.505 --> 02:13:29.245
for lunch,
1630
02:13:29.625 --> 02:13:31.005
you don't have to sit there.
1631
02:13:31.465 --> 02:13:33.485
You can set it to the low fee transaction.
1632
02:13:34.800 --> 02:13:35.860
And in fact, for,
1633
02:13:36.639 --> 02:13:37.219
I think,
1634
02:13:37.599 --> 02:13:39.380
quite a few I mean,
1635
02:13:40.159 --> 02:13:42.260
maybe we can talk about the trustless aspect
1636
02:13:42.800 --> 02:13:49.614
because I think it's very interesting about how Bitcoin is all about the trustless. But if you actually look at most actual Bitcoin transactions,
1637
02:13:50.075 --> 02:13:53.135
there's always a very high degree of trust between the parties,
1638
02:13:53.679 --> 02:14:08.425
right, in the sense of, like, you know, hey. We pay someone's salary in Bitcoin. Right? Okay. We're not gonna double spend our employee because then it's not gonna go to work next week. Week. Also, it's unethical, and it's, like, not normal human behavior. Right? So for for, like, for a lot of transactions,
1639
02:14:08.965 --> 02:14:16.650
there is a mutual trust. Right? And in that situation, you can set the mempool fee to 1 set per byte, and it's going to confirm eventually. In worst case,
1640
02:14:17.030 --> 02:14:27.105
if it happens that suddenly there's a big spike like that, well, then you'll figure it out. You know? It's gonna be a little bit of a hassle. Yeah. I think that's the big takeaway is that the fee rate you use or
1641
02:14:27.485 --> 02:14:28.304
whether you
1642
02:14:28.679 --> 02:14:29.739
accept the transaction
1643
02:14:31.000 --> 02:14:39.994
on 0 comp or 6 comps, it all really depends on your individual threat model and use case and amount of the transact it's it really depends.
1644
02:14:40.295 --> 02:14:45.994
And so for some people, they can always send 1 SAP per vbyte. Even if it takes a year to get confirmed, they'll wait
1645
02:14:46.480 --> 02:14:50.739
because they just might be sending it between 2 of their same wallets, and they know they're not going to
1646
02:14:51.199 --> 02:14:52.579
double spend their own transaction.
1647
02:14:53.360 --> 02:14:53.860
But,
1648
02:14:54.480 --> 02:15:03.145
if I wanna say, hey. Let's let's buy a $1,000,000 worth of gift cards, I'm pretty sure you won't accept the zero comp for that. Right? But what about, layer 2 networks?
1649
02:15:03.750 --> 02:15:11.610
Oh, yeah. Exactly. I wanted to point out that all of this is assuming that transaction propagation is based on this perfectly fair
1650
02:15:13.885 --> 02:15:14.545
the transaction,
1651
02:15:14.845 --> 02:15:25.280
the more the faster it's going to get mined. And that's not quite true. Right. So how does that apply to, like, lightning, for example? If I have a lightning node and I have to force close a channel,
1652
02:15:25.820 --> 02:15:33.505
how do the fees work with that? Yeah. Okay. So this is something I spend a lot of my time thinking about because in all layer 2 contracts,
1653
02:15:34.045 --> 02:15:35.744
you have a particular
1654
02:15:36.045 --> 02:15:37.105
set of conditions
1655
02:15:37.790 --> 02:15:38.290
that
1656
02:15:38.590 --> 02:15:39.090
makes
1657
02:15:39.630 --> 02:15:41.250
fees extremely important
1658
02:15:41.790 --> 02:15:42.530
and dangerous.
1659
02:15:43.630 --> 02:15:57.050
So one thing is when you're doing a lightning transaction, right, you and your counterparty are negotiating the fee rate well before you're ever going to broadcast it because the whole point is you're going to exchange these transactions and payments
1660
02:15:57.430 --> 02:16:10.255
and only settle on chain if you really need to or when both of you decide to close the channel. Right? So what really goes wrong is when you have a unilateral close, as in your counterparties trying to cheat you, your counterparties went offline,
1661
02:16:10.990 --> 02:16:15.010
whatever it is. Something went wrong. So now you need to broadcast your transaction.
1662
02:16:15.550 --> 02:16:16.530
And that might be
1663
02:16:16.830 --> 02:16:26.094
hours, days, weeks after you decided what the fee rate on that transaction is going to be. And if your counterpart is trying to cheat you, there's no way you're gonna sign an RBF with them because
1664
02:16:26.750 --> 02:16:29.730
they're like, I'm trying to steal your money. Why would I give you another signature?
1665
02:16:31.230 --> 02:16:32.449
And so that combination
1666
02:16:33.550 --> 02:16:35.010
makes it quite
1667
02:16:35.835 --> 02:16:39.215
dangerous. So for example, if we go back to the second slide
1668
02:16:39.595 --> 02:16:51.119
where the fee rate the the minimum fee rate of the mempool went from, like, 1 sat per vbyte to, like, 20 sat per vbyte. Let's say you open a lightning channel and, you know, you have some HTLCs
1669
02:16:51.420 --> 02:16:51.920
going,
1670
02:16:52.565 --> 02:16:58.665
and you negotiated a fee rate of 10 or even 15 sats per vBuy on your commitment transaction.
1671
02:16:59.790 --> 02:17:00.290
But
1672
02:17:00.670 --> 02:17:03.010
then something goes wrong and you need to broadcast.
1673
02:17:03.950 --> 02:17:04.450
Well,
1674
02:17:05.229 --> 02:17:15.395
the commitment transaction will straight up not even make it into anyone's mempool. Maybe it will make it into Wiz's mempool because his is still the floor is still one Zap per vite. But for the most part,
1675
02:17:15.935 --> 02:17:19.370
it's just not gonna work. And then you say, oh, Gloria, what about CPFB?
1676
02:17:20.551 --> 02:17:29.735
Right? Commitment transactions have anchor outputs, so either counterparty in the lining channel should be able to attach a very high fee rate child to their commitment transaction.
1677
02:17:30.436 --> 02:17:30.936
And
1678
02:17:32.035 --> 02:17:32.855
news flash,
1679
02:17:33.556 --> 02:17:38.689
the first transaction will not make it in and we're actually only validating transactions
1680
02:17:38.990 --> 02:17:39.490
individually.
1681
02:17:39.870 --> 02:17:48.195
So we'll reject the first one. We'll look at the high fee child, and we'll say, well, these inputs are not available because they belong to a transaction we rejected.
1682
02:17:48.975 --> 02:17:49.635
And so
1683
02:17:50.095 --> 02:18:03.266
oops. Sorry. Neither of them are getting in. So it sounds like lightning has a pretty big security hole right now based on what you just said. Exactly. This is, this is why I'm excited to be here today to tell you everything's broken and we need to fix it.
1684
02:18:04.285 --> 02:18:06.945
No. But I I think this particular issue
1685
02:18:07.325 --> 02:18:11.665
again, we have not seen a fee rate market like that since April of last year.
1686
02:18:12.131 --> 02:18:17.511
And I'm not saying that there is a reliable attack that, you know, attackers can always execute.
1687
02:18:18.051 --> 02:18:25.535
But if you think about it as, you know, 100 of 1,000,000,000 of dollars of capital is locked into lightning contracts and other l two contracts,
1688
02:18:26.795 --> 02:18:27.935
and, you know,
1689
02:18:28.315 --> 02:18:42.325
the fee rate market or the, you know, usage of the mempool becomes less predictable. We're not able to say, oh, in one week's time or in one month's time, we know that there's gonna be room in the mempool for a 10 sat per vBuy transaction.
1690
02:18:42.865 --> 02:18:45.285
These attacks become more and more critical.
1691
02:18:46.450 --> 02:18:49.110
And again, this is on a very long time horizon.
1692
02:18:49.570 --> 02:18:50.630
Right? So as
1693
02:18:51.010 --> 02:19:00.645
as protocol developers, we're thinking about something like this, where it's like, okay, when you're building an l 2, hopefully there is a seamless interface between l 2 and l 1.
1694
02:19:01.186 --> 02:19:05.560
And I think mempool is where that security assumption really breaks down. Because
1695
02:19:05.939 --> 02:19:07.159
to to put it simply,
1696
02:19:07.779 --> 02:19:09.960
lightning and all other l two protocols
1697
02:19:10.825 --> 02:19:15.965
have a security assumption that you will always be able to mitigate counterparty risk
1698
02:19:16.825 --> 02:19:17.325
by
1699
02:19:18.280 --> 02:19:18.860
by broadcasting
1700
02:19:19.320 --> 02:19:23.340
something on chain to, you know, revoke their funds
1701
02:19:24.200 --> 02:19:32.675
or to, know, get your justice transaction in. And that assumption is not always true. It's not always false. Okay? Not to scare everyone.
1702
02:19:33.580 --> 02:19:46.885
But I think this is going to become more and more dangerous, and we need to we need to fix it. But also on the scaring part, like, I mean, normal lightning wallet when it opens a channel, it sets that fee pretty high. Yes. So it sets it to a level
1703
02:19:47.186 --> 02:19:54.300
such that it's relatively unthinkable, even if 2017 were to happen again, that it wouldn't,
1704
02:19:54.760 --> 02:20:05.205
even make it into people's mentals. It's it's definite I mean, you you can imagine it happening, but it's, like, it's it's unlikely. You know? Yeah. So essentially all the,
1705
02:20:05.745 --> 02:20:10.005
unilateral closes overpay heavily because they cannot so,
1706
02:20:10.899 --> 02:20:14.420
maybe to pick up your point from earlier. The only thing that has,
1707
02:20:14.820 --> 02:20:15.320
propagation
1708
02:20:16.020 --> 02:20:24.244
guarantees in Bitcoin is blocks. We guarantee that we will deliver blocks to other nodes so that everybody can catch up to the best chain tip.
1709
02:20:24.625 --> 02:20:27.045
Transactions do not have propagation guarantees.
1710
02:20:27.505 --> 02:20:31.830
We forward them at best effort. Generally, it means that all transactions
1711
02:20:32.450 --> 02:20:35.350
get to all other nodes in a minute or so.
1712
02:20:36.485 --> 02:20:40.346
And once they're in a block, of course, as part of the block, they do get propagated.
1713
02:20:40.806 --> 02:20:44.186
But before that, the unconfirmed transaction do not have guarantees.
1714
02:20:45.150 --> 02:20:50.450
But essentially, the L twos rely on the assumption that there are guarantees for transaction propagation.
1715
02:20:51.230 --> 02:21:01.825
So that that's where the the problem comes. And Sergei, I think you run a pretty large, lightning node for your business. Can you tell us any stories? Has Bitrefill ever seen anyone trying to,
1716
02:21:02.450 --> 02:21:05.270
steal funds out of a lightning channel during that time?
1717
02:21:05.650 --> 02:21:08.950
I guess it was April of last year. Did you see any, shenanigans?
1718
02:21:10.556 --> 02:21:13.375
Probably not. No. We we we've we've had shenanigans,
1719
02:21:13.755 --> 02:21:16.415
but they're like someone made a mistake
1720
02:21:17.035 --> 02:21:17.936
and accidentally,
1721
02:21:18.395 --> 02:21:28.770
you know, their wallets started doing stuff. And so we we've, our things to slap them and and so on. And then and then the person reached out and say, hey. I'm I'm I fucked up. You know, you gotta
1722
02:21:29.075 --> 02:21:42.300
help me out, and we help out. But I think it's also, like, important to to keep in mind, again, like like we talked about that, like, a financial transaction has a level of trust. Right? So for example, at Bitrefill, like, our biggest channels are going to be,
1723
02:21:42.840 --> 02:21:48.306
with with other companies. Right? True. So we'll have a big channel or multiple channels with Stripe or Bitfinex,
1724
02:21:49.645 --> 02:21:50.145
BlueWallet,
1725
02:21:51.485 --> 02:21:53.060
Asank, and so on. Right?
1726
02:21:53.619 --> 02:21:54.840
And so it's not
1727
02:21:55.220 --> 02:22:02.135
like, you know I mean, Bitcoin is built for, like, the wild west, you know, everyone for themselves. But they can't. In in reality,
1728
02:22:02.515 --> 02:22:05.415
most of it isn't. Right? I mean, just because,
1729
02:22:05.875 --> 02:22:15.070
imaginably, we could, with a very sophisticated attack like this, you know, rob our good friends at a strike of money, doesn't mean that we do, you know, we have business
1730
02:22:16.010 --> 02:22:19.024
coming in decency and so on. So it depends.
1731
02:22:19.404 --> 02:22:29.020
And Lightning Channels have a certain trust factor in them by default, in that you kind of rely on the person, like, keeping their node up
1732
02:22:29.399 --> 02:22:35.234
and running and not doing anything stupid and so on, which is like a weak trust. Right? But there is a little bit
1733
02:22:35.774 --> 02:22:41.300
of a type of trust. You don't trust them with your money, but you trust them to not mess things up.
1734
02:22:41.859 --> 02:22:45.319
I think we actually see this in many layer 2 networks or
1735
02:22:45.620 --> 02:22:48.840
or maybe more broadly technologies built on top of Bitcoin where
1736
02:22:49.205 --> 02:22:51.465
there's not only the anarchist,
1737
02:22:52.165 --> 02:22:54.345
you know, trust of the base layer blockchain.
1738
02:22:54.805 --> 02:22:59.380
For example, if I had a channel open with you and for some reason my node got messed up and
1739
02:22:59.920 --> 02:23:12.845
you've had to, like, force close the channel and you got those funds, we have some kind of reputation or relationship together. I would say, hey, can you, you know, let's settle up properly. I think this is quite common, like you said, in the b to b space where
1740
02:23:13.450 --> 02:23:20.910
Bitcoin banks essentially have very large channels between each other or Bitcoin payment processors or merchants selling gift cards, etcetera.
1741
02:23:21.775 --> 02:23:24.995
And, I I think this is this is one part of the,
1742
02:23:26.095 --> 02:23:31.075
maybe to to mitigate the risk in a in a different way from from what you mentioned earlier.
1743
02:23:31.520 --> 02:23:42.726
Okay. Sure. Lightning has some security holes or threat models, maybe need to be adjusted for when the mem mempool gets full all the time. But one of these mitigations is actually the social
1744
02:23:43.266 --> 02:23:45.365
maybe capital part of it.
1745
02:23:45.745 --> 02:23:47.926
I mean, how do Yeah. Sure. But, like,
1746
02:23:48.705 --> 02:23:54.310
just maybe to play doubles advocate or to provide a perspective of someone who
1747
02:23:54.689 --> 02:23:55.990
is trying to design
1748
02:23:57.756 --> 02:24:00.176
our policy rules and our mempool
1749
02:24:00.795 --> 02:24:07.056
for the the node runners that are using a Raspberry Pi. You know, the people in countries where
1750
02:24:07.500 --> 02:24:10.960
this is the most free option for them to transact
1751
02:24:11.500 --> 02:24:14.240
and their government is actively trying to censor
1752
02:24:14.955 --> 02:24:18.255
or sorry. You know, someone is trying to censor
1753
02:24:18.715 --> 02:24:23.774
or freeze their ability to use money for whatever it is that they need,
1754
02:24:24.640 --> 02:24:26.660
that may or may not be politically,
1755
02:24:28.160 --> 02:24:32.420
accepted there. Right? Like, we want the default option to be,
1756
02:24:33.635 --> 02:24:41.735
as minimal as possible, as private as possible, as censorship resistant as possible. So, of course, there are many,
1757
02:24:42.710 --> 02:24:50.065
scenarios where there is a social aspect or there is a legal framework with which people can use to, externally
1758
02:24:50.604 --> 02:24:53.265
to the Bitcoin and lightning assumptions
1759
02:24:53.885 --> 02:24:56.305
to, you know, figure out how they're going to transact.
1760
02:24:57.211 --> 02:24:57.870
I think
1761
02:24:58.410 --> 02:25:03.391
the most private, you know, censorship position, blah, blah, option should be the default.
1762
02:25:03.905 --> 02:25:25.135
I strongly agree. I mean Yeah. With everything that you say and with everything that you do is super important. I mean, we're building Bitcoin to survive in wartime. Right? I just sort of added in there because Yeah. Yeah. Maybe maybe people get the impression that Right. Shit shit, the fees goes up. All all of my money is gonna be stolen from lightning. Right. That's not necessarily the case. You know? I mean But we're talking about
1763
02:25:25.595 --> 02:25:26.415
a sort of
1764
02:25:26.795 --> 02:25:27.454
a risk,
1765
02:25:27.994 --> 02:25:29.135
that is theoretical,
1766
02:25:29.971 --> 02:25:33.830
highly unlikely, requires a sophisticated attacker in a special set of circumstances.
1767
02:25:34.450 --> 02:25:44.176
We need to fix that risk. Right? And that's what you're doing. Yes. And and the great people at lightning and so on. Yeah. But, you know, we it's it's important to know
1768
02:25:44.530 --> 02:26:05.939
Yeah. I like that we have balance. How exposed you are. Yeah. Balanced voices on on this account. I want to jump in here now too. So, I mean, it's easy to build a trusted relationship on a default of no trust necessary. Right? You can sort of upgrade your relationship with somebody else by adding a trusted relationship and then you can do more things than with the default.
1769
02:26:06.240 --> 02:26:06.740
But,
1770
02:26:07.359 --> 02:26:13.305
yeah, it is important that it works for for well, Bitcoin is the money of enemies. Right? Taj said that.
1771
02:26:14.645 --> 02:26:19.465
So do you recommend someone to open a would you recommend someone to open a lightning channel with their enemy?
1772
02:26:20.020 --> 02:26:20.520
No.
1773
02:26:21.620 --> 02:26:34.936
I don't think that that you you do open yourself up to a little bit of abuse. If you have a lightning channel with someone, they can make it hard for you to get your money back. They can brief you for the fees for opening the channels and things like that. But, generally
1774
02:26:36.150 --> 02:26:36.971
so we have
1775
02:26:37.351 --> 02:26:44.345
the the base layer where you don't have to need a lot of trust. And then, of course, you can build business relationships
1776
02:26:44.645 --> 02:26:50.025
on that, and you can do more with that. It's sort of like we have a very simple stupid base layer in Bitcoin,
1777
02:26:50.380 --> 02:26:52.000
and then we build the complex
1778
02:26:52.540 --> 02:26:54.560
things at the edges and on top
1779
02:26:54.939 --> 02:27:00.915
because it's easier to go that direction than vice versa. Going from a trusted trust necessary
1780
02:27:01.455 --> 02:27:02.355
to an untrusted,
1781
02:27:03.056 --> 02:27:07.955
would would you want to open a bank account with somebody that you know is gonna try to steal money from you?
1782
02:27:08.561 --> 02:27:11.940
Nobody suggested that here. No. No. No. I'm I'm just illustrating.
1783
02:27:12.480 --> 02:27:23.556
Yeah. And, obviously, hopefully, nobody gets the impression that I'm criticizing lightning or thinking that they're building too fast. But I think in Bitcoin, we have more of a philosophy of building
1784
02:27:24.096 --> 02:27:28.080
bottom up. So, you know, we have our base layer, no trust required
1785
02:27:28.540 --> 02:27:29.520
as security
1786
02:27:29.980 --> 02:27:32.240
model is as difficult as possible.
1787
02:27:32.675 --> 02:27:40.055
And then we're slowly, you know, we're slowly building up to a scalable payment system that can handle the,
1788
02:27:40.859 --> 02:27:44.000
the thousands of transactions per second that, honestly,
1789
02:27:44.540 --> 02:27:53.765
we cannot fit into a block right now. Right? So we cannot afford to not build lightning or, you know, some scaling solution. But the way that I think we do things,
1790
02:27:54.145 --> 02:27:54.385
not
1791
02:27:55.185 --> 02:27:57.045
what I like about Bitcoin development
1792
02:27:57.620 --> 02:27:58.760
is we build bottom
1793
02:27:59.220 --> 02:28:01.479
up, and we do we put security first.
1794
02:28:01.780 --> 02:28:05.765
I think I think that's the way we should think about things and what I really like.
1795
02:28:06.725 --> 02:28:10.425
So Yeah. I think we we covered a lot of the very interesting
1796
02:28:10.805 --> 02:28:12.024
past of the mempool
1797
02:28:13.210 --> 02:28:17.390
historical data trends and now we just kind of touched on the present
1798
02:28:17.930 --> 02:28:19.149
state of the mempool
1799
02:28:19.770 --> 02:28:24.665
and how it affects various threat models for various use cases, but what about the future?
1800
02:28:25.285 --> 02:28:34.830
Mert, you usually give us, like, a weather report of what's going on in the mempool, like, how about a prediction? What's the future weather report for the mempool? What do you think is gonna happen? How is the mempool gonna change over time?
1801
02:28:35.690 --> 02:28:41.444
That's very interesting and I've been thinking about that. But, I I mean, I I don't know. But
1802
02:28:42.385 --> 02:28:42.885
so,
1803
02:28:44.064 --> 02:28:52.730
from the stats that I'm seeing, I think that, the number of payments has been growing pretty steadily. The amount of money that is being sent has been growing pretty steadily.
1804
02:28:53.110 --> 02:28:57.556
And what led to this congestion in the last year was that there,
1805
02:28:58.415 --> 02:29:00.255
were just more and more transaction happening
1806
02:29:01.056 --> 02:29:01.556
transactions.
1807
02:29:01.936 --> 02:29:02.436
And,
1808
02:29:04.350 --> 02:29:04.850
eventually,
1809
02:29:06.110 --> 02:29:08.050
the block space was completely
1810
02:29:08.510 --> 02:29:12.495
getting used. And the block space supply is pretty inelastic.
1811
02:29:13.436 --> 02:29:17.775
While you're slightly below it, it'll clear every night or at least every weekend,
1812
02:29:18.290 --> 02:29:18.790
and,
1813
02:29:19.569 --> 02:29:21.990
the fees will will calm down again.
1814
02:29:22.450 --> 02:29:33.825
As soon as you overshoot a little bit and the number of transactions that get submitted to the network exceed the available block space, it'll just continue growing. Right? Because there's not enough new block space
1815
02:29:34.351 --> 02:29:36.210
to to clear it out. And
1816
02:29:36.750 --> 02:29:39.330
so we had a bit of a demand shock,
1817
02:29:40.110 --> 02:29:40.610
after
1818
02:29:41.365 --> 02:29:49.465
the market. 1st, we had a supply shock and then we had a demand shock. 1st, China kicked out their miners and, the hash rate went down by 47%,
1819
02:29:49.925 --> 02:29:51.030
I think, at the peak.
1820
02:29:51.511 --> 02:29:52.011
And,
1821
02:29:54.391 --> 02:29:56.170
then just around the same time,
1822
02:29:56.950 --> 02:30:00.650
Blockchain dotcom, who is responsible for about 30% of all transactions,
1823
02:30:01.145 --> 02:30:03.405
finally updated from paid to public key hash,
1824
02:30:04.266 --> 02:30:08.686
addresses to paid to witness public key hash. So the the inputs went from 148
1825
02:30:09.466 --> 02:30:09.966
bytes
1826
02:30:10.470 --> 02:30:19.449
to 68 vBytes on each input. So they they were less than half the size. And suddenly this being slightly over the blocks based demand
1827
02:30:19.846 --> 02:30:27.710
went to, oh, we we're like at 90 ish percent of the block space being used and fees dropped through the floor. And then
1828
02:30:28.170 --> 02:30:29.290
the the hash rate,
1829
02:30:29.770 --> 02:30:36.875
regenerated maybe even faster than some people expected. Some people were, like, it will take a year for all these companies to resettle and
1830
02:30:37.435 --> 02:30:46.070
now those they were heavily incentivized to get those miners Oh, yeah. As soon as possible. So blocks were coming faster and transactions were smaller. At least, you know, blocking.com's,
1831
02:30:47.810 --> 02:31:10.380
So so in a way, I think we'll we'll see a couple more, demand shocks. For example, with pay to tap route, It took now almost 5 years, but we're at 83% Segway transactions now. And, with Taproot, I assume a similar pattern. It will take a few years for use cases to come up. But then especially for multisig, multisig will be a lot cheaper to do with key path spends on pay to taproot.
1832
02:31:10.855 --> 02:31:19.755
And, keypad spend in pay to tap route is only 58 VBIZ. Mhmm. Whereas, for example, a 2 or 3 multisig, even with native segwit right now, is a 105.
1833
02:31:20.250 --> 02:31:20.750
So,
1834
02:31:21.449 --> 02:31:24.590
or or older formats are a 140 or 297
1835
02:31:25.050 --> 02:31:30.435
for legacy even. So the the demand from multisig transactions will go down
1836
02:31:30.814 --> 02:31:31.395
a bunch,
1837
02:31:31.935 --> 02:31:34.274
and then, Lightning is actually maturing
1838
02:31:34.734 --> 02:31:36.335
maybe a little quicker than than,
1839
02:31:37.460 --> 02:31:41.540
so for example, Rusty said building lightning will be a 20 year effort. And,
1840
02:31:43.061 --> 02:31:46.681
now people are reporting that they're they're routing thousands of transactions
1841
02:31:47.125 --> 02:31:50.024
only for their own node that they're administering
1842
02:31:50.484 --> 02:31:52.024
from home. So
1843
02:31:52.645 --> 02:31:53.625
I think that the
1844
02:31:54.061 --> 02:31:57.681
smaller payments will be pushed out to the payment layer to Lightning.
1845
02:31:58.061 --> 02:31:58.561
The,
1846
02:31:59.580 --> 02:32:02.881
multi sec transactions will move to these more efficient formats.
1847
02:32:03.285 --> 02:32:04.985
So for the middle
1848
02:32:05.365 --> 02:32:08.665
term, probably block space will remain relatively abundant.
1849
02:32:09.365 --> 02:32:09.865
But
1850
02:32:10.245 --> 02:32:10.985
we will,
1851
02:32:11.750 --> 02:32:14.489
if payments continue to grow and I mean,
1852
02:32:14.869 --> 02:32:17.609
conferences certainly seem to grow, then
1853
02:32:18.390 --> 02:32:23.655
we will always have some demand. And what last year showed, I think, is that
1854
02:32:25.075 --> 02:32:31.380
that transacting on Bitcoin is valuable enough for a lot of people that they were willing to pay significant fees.
1855
02:32:31.760 --> 02:32:38.500
And we have at least 2 more havings or so until the the subsidy is, gonna start to be really small.
1856
02:32:39.555 --> 02:32:41.654
It sounds like a typical market
1857
02:32:42.274 --> 02:32:45.814
free market economy where you have, limited supply and
1858
02:32:46.390 --> 02:32:57.115
or I guess maybe a variable supply and a variable demand. And if the demand ever exceeds the supply, then, sure, the prices go up. This is just basic economics, but will we ever see a time where
1859
02:32:57.575 --> 02:32:58.235
the demand
1860
02:32:58.615 --> 02:33:06.870
constantly exceeds the supply and the mempool is just constantly full and transactions are getting priced out essentially. Well, one thing I want to add,
1861
02:33:07.650 --> 02:33:09.750
sorry to steal a bit,
1862
02:33:10.505 --> 02:33:18.284
is demand is not just comprised of how many people are using Bitcoin to send money. Right? And and this is this goes further than just,
1863
02:33:19.570 --> 02:33:25.190
like, oh, some of it's happening on lightning, which we don't see on chain. Or a lot of it is happening on lightning, actually.
1864
02:33:25.811 --> 02:33:28.230
And, you know, as you alluded to, there's
1865
02:33:28.675 --> 02:33:31.095
plenty of ways that wallet developers
1866
02:33:31.635 --> 02:33:35.175
can save users money simply by making smaller transactions.
1867
02:33:36.490 --> 02:33:38.110
There are so many advancements,
1868
02:33:38.490 --> 02:33:42.110
at least that I know that exist in the Bitcoin Core Wallet and can be used
1869
02:33:42.490 --> 02:33:42.990
to
1870
02:33:43.495 --> 02:33:44.555
save users money.
1871
02:33:45.495 --> 02:33:49.435
And in the enterprise world as well to batch payments
1872
02:33:49.735 --> 02:33:55.279
or fee bump in a more smart way, shout out to CardCoins for doing batched
1873
02:33:56.060 --> 02:33:56.720
RBF payments,
1874
02:33:58.699 --> 02:34:04.605
that save users money. So, like, I don't think block space or, like, demand for block space necessarily
1875
02:34:05.545 --> 02:34:09.965
shows you how many people are transacting with Bitcoin. That that's my main point.
1876
02:34:10.601 --> 02:34:17.815
Because I think when people see empty blocks or when when they see, like, an empty mempool, they're like, oh, nobody's using Bitcoin, and that's just not true.
1877
02:34:18.136 --> 02:34:21.756
Right. But but also to elaborate on on that is that,
1878
02:34:22.136 --> 02:34:24.395
again, if when blockspace is cheap,
1879
02:34:24.990 --> 02:34:27.890
people will use it. When it's very, very expensive,
1880
02:34:28.270 --> 02:34:35.315
people feel pain and they try to solve it in different ways, right, and we talked about that. You can That's time. A ton of optimizations.
1881
02:34:36.095 --> 02:34:38.275
And, I mean, we've seen massive improvements,
1882
02:34:39.055 --> 02:34:46.801
in in optimizations in the mempool over the past 4 years from I mean, it was originally interesting because it it was so hilariously bad.
1883
02:34:47.360 --> 02:34:54.945
Right? And now nobody's doing any hilariously bad stuff. It was funny, right, how how batch transactions were sort of starting mid 2017.
1884
02:34:55.645 --> 02:34:57.985
And then after that huge spike in 2017,
1885
02:34:58.490 --> 02:35:04.590
a lot of people very quickly started rolling that out. Right? Right. And that's that's, of course, because users are heavily incentivized
1886
02:35:05.050 --> 02:35:18.000
to optimize their use of Bitcoin's blockchain space. Right? Once those fees spike up, yeah, let's let's prioritize that Segwit implementation, right, or let's move our low low value transactions to layer twos.
1887
02:35:18.620 --> 02:35:25.825
And and and that's when we saw a huge lightning adoption too. Right? But so that's and and and so there are that there's a upwards pressure,
1888
02:35:26.285 --> 02:35:31.345
which is Bitcoin is growing and there is more of everything. Right? But there are downwards pressures. There are optimizations.
1889
02:35:32.080 --> 02:35:42.025
There's other solutions, you know. Someone, might say, hey. But you know what? We can actually solve this particular thing in a centralized way, and it moves off of there. There's a lot of different ways of of achieving,
1890
02:35:42.405 --> 02:35:46.505
you know, the same goal. Right? And so when when the price is high, that creates,
1891
02:35:47.045 --> 02:35:52.960
an incentive for for someone to rethink of it. I mean, I've always expected there to
1892
02:35:53.340 --> 02:36:03.505
be a Bitcoin payment service provider at some point, that just like takes Bitcoin here, completely centralized. It takes some Bitcoin here, sends the Bitcoin there and just does it all on chain, but it still hasn't happened.
1893
02:36:04.205 --> 02:36:04.944
We've been
1894
02:36:05.490 --> 02:36:07.590
the so I mean, these things,
1895
02:36:08.290 --> 02:36:10.150
will probably start happening,
1896
02:36:10.690 --> 02:36:11.010
when
1897
02:36:12.210 --> 02:36:14.790
especially during this, because the mempool moves,
1898
02:36:15.105 --> 02:36:31.705
it doesn't grow, nice and steady. It moves in in extreme spikes. Yeah. Whenever the market's pumping hard, everyone wants to move their money to exchange and withdraw. And there's a lot of stuff that's algorithmic here in terms of fee estimation and a bunch of other things. So oftentimes, it's not even a human. Where, like,
1899
02:36:32.085 --> 02:37:06.710
there's bots that they will send from one exchange to another exchange. And I think the coffee transactions are getting pushed out, priced out of Bitcoin, right? And and that's, like, the future of Bitcoin is that we migrate to this multilayer ecosystem where sometimes you use Lightning or Liquid or some custodial service. Right? Well, it might. I mean, you'd be surprised with how many really small transactions are still happening on chain. I mean, I agree. I mean, I'm a mega Lightning fan. I want to move it to Lightning, but a lot of people use on chip Bitcoin for really small transactions. So they'll even at 1 cent per byte, they pay like a pretty high percent
1900
02:37:07.485 --> 02:37:13.025
of the value to to make In a way, it's a Alright, guys. I guess we're out of time for our our panel, but
1901
02:37:14.045 --> 02:37:16.305
but thanks for sharing your, very passionate
1902
02:37:16.690 --> 02:37:19.990
opinions on the, state of the mempool and the future of the mempool.
1903
02:37:21.490 --> 02:37:25.110
I guess that's it. Thanks. Thank you, and glory to you, Quinn. Thank you.
1904
02:37:56.530 --> 02:37:57.030
Well,
1905
02:37:57.490 --> 02:37:57.990
hello.
1906
02:37:59.090 --> 02:38:00.470
We're here to talk about
1907
02:38:01.785 --> 02:38:10.365
why lightning is not private. It's, it's it's, you know, as the b cashers would say, doomed to failure. It's never gonna work, all all that.
1908
02:38:11.490 --> 02:38:12.391
So welcome,
1909
02:38:13.250 --> 02:38:17.270
Evan Kaludis from, Zeus Lightning, Anthony Ronning from Infurvius,
1910
02:38:17.730 --> 02:38:19.190
Nifty Nye from Blockstream.
1911
02:38:20.226 --> 02:38:20.726
And,
1912
02:38:21.266 --> 02:38:21.766
yeah.
1913
02:38:22.945 --> 02:38:24.005
In all seriousness,
1914
02:38:24.785 --> 02:38:26.966
lightning is kind of pitched as
1915
02:38:27.730 --> 02:38:37.351
a magic privacy solution. You you hop on Lightning, you you spend your money over Lightning, and there's nothing to worry about. Like, no information leaking. It fixed
1916
02:38:38.114 --> 02:38:39.734
the, privacy issue.
1917
02:38:40.755 --> 02:38:43.255
And the technical reality of that is
1918
02:38:43.715 --> 02:38:44.215
not
1919
02:38:45.040 --> 02:38:45.540
quite.
1920
02:38:47.680 --> 02:38:48.899
So I guess to start,
1921
02:38:49.760 --> 02:38:53.620
you know, the the whole issue between sending and receiving there.
1922
02:38:55.024 --> 02:39:07.090
I guess wild card, anybody wanna talk about the issues in terms of when you receive money, all the information that just leaks out into the world that a lot of users might not be aware of?
1923
02:39:08.270 --> 02:39:10.085
Yeah. I think, to start off,
1924
02:39:10.565 --> 02:39:33.814
senders have amazing privacy on on lightning, from a general level. You know, there's some, you know, trade offs there, and you can get into the weeds on that. But when you're sending payments, you can, you have, like, onion routing messages going across the network. So, you know, you don't really know where it actually came from. You don't even know if the previous hop that a lightning, lightning payment is going through is actually who it is. But like you said, like, receivers on the other hand,
1925
02:39:34.195 --> 02:39:36.135
it's it's a little bit of a different story.
1926
02:39:37.210 --> 02:39:48.025
You have to, like, give information out to another person in order to get paid to actually receive money. So, some of that information that's leaked is like, you know, alias names, IP addresses.
1927
02:39:48.565 --> 02:39:52.825
If you have any unannounced channels, you know, you you may leak those as well,
1928
02:39:54.634 --> 02:39:55.881
in order to get paid down those channels.
1929
02:39:56.341 --> 02:39:58.120
So there's a there's a lot of,
1930
02:39:58.660 --> 02:40:04.386
you know, areas where receivers need to be a little bit careful, especially, like, if someone is just, like, posting
1931
02:40:04.926 --> 02:40:11.825
invoices onto, like, Twitter or something, and it's just, like, completely, you know, doxing all that information to the open world.
1932
02:40:12.511 --> 02:40:27.545
So, like, you know, I think I think there is some, like, you know, a lot of privacy gains that we can get on lightning. I think it comes down to the users not shooting themselves in the foot and having a little bit more education on, like, what to do and what not to do, when it comes especially when it comes to receiving on Lightning.
1933
02:40:28.141 --> 02:40:30.160
We're sort of multifaceted, though. Like,
1934
02:40:30.700 --> 02:40:39.726
application developers, they need to give users the tools to be able to not shoot themselves in the foot, but we also need to see some changes at a protocol level, I believe,
1935
02:40:40.105 --> 02:40:41.886
to really get to where we wanna be.
1936
02:40:42.586 --> 02:40:55.225
Yeah. I think, like, the one thing maybe that's kinda interesting to ask about Lightning privacy too is, like, it's more private than being on chain. Right? Like, when you do, like, can you sit down and you, like, look at it? Like, transacting on lightning is like
1937
02:40:56.005 --> 02:40:57.545
a step change function
1938
02:40:57.925 --> 02:41:02.750
in how private your actual transactions are. So, like, just when you're making transactions,
1939
02:41:03.130 --> 02:41:05.230
if you're gonna make a transaction with Bitcoin,
1940
02:41:05.851 --> 02:41:14.154
like, kinda I think I think it's I think it's true that it's more private if you're doing it on Lightning. So if you had to pick on chain versus Lightning and you're concerned about privacy,
1941
02:41:14.455 --> 02:41:16.875
that's definitely the right choice. Right? Oh, yeah. Definitely.
1942
02:41:17.335 --> 02:41:19.930
Okay. Especially if you're sending, you know, or switching.
1943
02:41:20.470 --> 02:41:23.450
Well, I mean, it's it's definitely more private, but just
1944
02:41:23.990 --> 02:41:25.290
it's not quite the
1945
02:41:25.945 --> 02:41:27.245
the perfect solution,
1946
02:41:27.625 --> 02:41:30.345
you know, that it kind of gets generalized about. But,
1947
02:41:31.145 --> 02:41:33.005
you know, speaking of solutions
1948
02:41:33.671 --> 02:41:35.131
to receiver side privacy,
1949
02:41:35.990 --> 02:41:38.650
you know, there there's a number of protocol proposals,
1950
02:41:39.671 --> 02:41:41.931
rendezvous routing, route blinding,
1951
02:41:42.355 --> 02:41:44.216
trampoline routing that could
1952
02:41:44.676 --> 02:41:48.136
potentially level that to the point where receivers are
1953
02:41:48.516 --> 02:41:52.240
at least more private than they are now, if not on par with senders.
1954
02:41:53.340 --> 02:41:57.440
You guys have any favorites there in terms of which one to go with?
1955
02:42:00.034 --> 02:42:00.435
Yeah.
1956
02:42:00.835 --> 02:42:17.915
I I you know, from from the protocol level, I haven't read, a lot of the specs. But I think, like, in general, just speaking at a high level, the ability to give out, like, you know, receivers need to give out some information to get paid. Ideally, that information, like, doesn't reveal anything about them. So it could have, like,
1957
02:42:18.455 --> 02:42:26.610
you know, a lot of, you know, maybe fake hops. Maybe it's like maybe it's like with rendezvous or or or route lining. And it's like, you know, get your payment to this location,
1958
02:42:27.150 --> 02:42:45.851
and then that location will will, you know, get the payment to me. Kind of the gist of that. So, you know, there's, it it kinda like cuts that separation where like, okay, everything previously we don't know where it came from, and then everything after we don't know where, you know, we don't know where it's going either. So I think there's, like, a lot of protocol advancements that that could happen,
1959
02:42:46.790 --> 02:43:13.185
as especially for receivers. But, yeah, I'd I'd be curious, like, if if you looked at, you know, where we are at with, like, being able to implement some of that on the protocol level. Yeah. So there's a couple different proposals. So what we're kinda talking about is, like, when you send a payment right now, usually, you if you wanna receive a payment on Lightning, you create something called an invoice. You give it to someone. Invoice has a bunch of information in it. Right? So it tells you who you're paying,
1960
02:43:13.725 --> 02:43:19.439
how much you're paying. Usually, there's a description of what you're buying, etcetera. So invoices themselves
1961
02:43:19.819 --> 02:43:25.935
leak basically all of your transaction data. Like, that's the whole payment. That's the whole transaction is in the invoice. Right? So,
1962
02:43:27.034 --> 02:43:36.790
there's some questions about, like, okay. Maybe we can if is there a way we can produce an invoice that doesn't tell you exactly which node on the network you're paying,
1963
02:43:37.250 --> 02:43:38.150
but can
1964
02:43:38.755 --> 02:44:02.065
pay to some intermediate node, and then that intermediate node will be able to figure out how to get to the person who actually wants to receive the payment. So So this is almost like I guess we call those, like, proxies in, like, normal networking stuff. Right? Yeah. And and it's interesting because a lot of the proposals, it's not really just, you know, making the data go away. It's like deferring to which parties are privy to who the receiver is.
1965
02:44:02.580 --> 02:44:10.440
So, you know, privacy is not just about, like, flipping a switch on or off. It's about selectively deciding who you want to know that information.
1966
02:44:12.405 --> 02:44:16.425
Yeah. And, I mean, you know, when it when it comes to, like, the the 3 proposals,
1967
02:44:16.965 --> 02:44:21.400
we're we're discussing, like, rendezvous routing, route blinding, trampoline routing.
1968
02:44:22.180 --> 02:44:22.840
It's really
1969
02:44:23.220 --> 02:44:29.955
they're all kind of in a way, like, doing the same thing just like little subtle differences.
1970
02:44:31.854 --> 02:44:34.835
Like, Gavin or Lisa, I mean, do you guys,
1971
02:44:36.015 --> 02:44:49.984
you know, have have any kind of thoughts in terms of the the privacy trade offs between the 3 of them? Like, the the benefits you can get out of, rendezvous versus route blinding versus trampoline and potential negative sides to that,
1972
02:44:50.604 --> 02:44:52.305
depending on which one gets implemented?
1973
02:44:52.925 --> 02:45:06.235
Yeah. So, like, I'm gonna be honest. I'm not as familiar with all the differences between, like, all three of them. I know that, like, as far as, like so all of these are, like, ways that you basically can find another node to, like, you know, finish the payment for you to the actual destination.
1974
02:45:07.335 --> 02:45:30.675
In terms of, like, what's being worked on currently, I know that the route widening thing is currently implemented in core lightning, which is a project I work on, and there's an a few other teams that are working on route binding currently. So in terms of, like, out of these three things, which is the most likely to get over the line first in terms of, like, being accessible to the most people who are running lightning, it'll definitely be route binding.
1975
02:45:31.520 --> 02:45:32.181
I don't
1976
02:45:32.641 --> 02:45:35.540
I was just talking to one of the maintainers
1977
02:45:35.920 --> 02:45:39.940
of the async project. They're working on their route binding stuff.
1978
02:45:41.614 --> 02:45:48.835
I can't remember. I think trampoline routing is the one that we're supposed to be doing this year also, just for that and stuff. So maybe that'll be there soon.
1979
02:45:49.530 --> 02:45:52.891
But these things are, like, actively proposed. Like, they're currently in progress, and,
1980
02:45:53.530 --> 02:45:55.391
I've been tasked with asking if you
1981
02:45:55.770 --> 02:45:59.845
if you're a developer and you wanna, like, get involved in improving some of the payment routing
1982
02:46:00.305 --> 02:46:01.685
privacy on Lightning,
1983
02:46:02.064 --> 02:46:06.564
we could definitely use some help reviewing the route blinding PR, which I think is number 765
1984
02:46:07.290 --> 02:46:08.190
on the bolts,
1985
02:46:09.690 --> 02:46:10.190
repository.
1986
02:46:11.370 --> 02:46:11.850
Cool.
1987
02:46:12.970 --> 02:46:13.470
Evan,
1988
02:46:15.404 --> 02:46:18.705
any thoughts on which, path we should take here?
1989
02:46:19.645 --> 02:46:24.160
Yeah. Route blinding is exciting because we have, I would say, the most tangible stuff.
1990
02:46:24.480 --> 02:46:24.980
But,
1991
02:46:25.680 --> 02:46:27.620
really, I I don't think we're gonna
1992
02:46:28.480 --> 02:46:35.976
really get, like, a full understanding of what all the implications and and limits are really until we're testing it out in the wild. So I'm very excited to
1993
02:46:36.860 --> 02:46:45.360
see that tooling out in, you know, various node projects out in the wild and people just trying it and and figuring out where they get caught up and whatnot. So,
1994
02:46:46.015 --> 02:46:53.615
you know, wherever I can, either 3 of these, you know, methods, I would love to get them into so people can try them on the go and,
1995
02:46:55.400 --> 02:46:59.340
you know, just give it a give it a shot. And, you know, since these
1996
02:46:59.880 --> 02:47:06.245
all these methods are really just about, like, changing up how the routing goes goes, like, instead of just having the the sender
1997
02:47:06.625 --> 02:47:11.365
figuring out the path to it. It's gonna be interesting to see if people also have,
1998
02:47:12.460 --> 02:47:23.805
any pains with unable to to being able to find, like, a path to make their payments. So that's the trade off with a lot of these proposals. It's like you're gonna be able to, get selective privacy in a lot of ways,
1999
02:47:24.585 --> 02:47:26.364
but it may make for a worse
2000
02:47:26.904 --> 02:47:27.404
UX
2001
02:47:27.950 --> 02:47:30.210
in terms of actually completing that payment.
2002
02:47:31.790 --> 02:47:32.290
Anthony?
2003
02:47:32.750 --> 02:47:40.436
Which one should we go with? What what's the the Yeah. I don't even think it's, like, mutually exclusively. Like, I think we've, you know, we've had,
2004
02:47:40.976 --> 02:47:49.520
I think the Electrum lightning implementation was, like, kind of the first to implement trampoline routing, which was kinda cool. I don't know anyone using that Python,
2005
02:47:50.140 --> 02:47:50.720
you know,
2006
02:47:51.100 --> 02:47:53.040
node. I don't know if you should.
2007
02:47:53.580 --> 02:48:06.080
But it's, like, it's, like, you know, awesome to be able to, like, innovate and, like, all of us like independently in all the different node implementations. Kind of like experimenting with different things and and contributing or hopefully contributing back to the specification process.
2008
02:48:06.561 --> 02:48:18.145
So we can all kind of all benefit from it. So, and I think I think async has also like a boom and a trampoline route in, themselves. So, you know, I think there's, like, combinations of things that we could all use to kind of,
2009
02:48:18.686 --> 02:48:30.580
you know, may you know, maybe it's possible to use trampoline routing with route planning in a way or, you know, think you know, vice versa. So, I, you know, I would I would really just like to have, like, the most amount of, like, privacy options
2010
02:48:31.005 --> 02:48:36.625
for users on lightning. But, like, again, I I do agree with everyone here that, you know, probably route binding,
2011
02:48:37.245 --> 02:48:45.370
you know, I I haven't looked at it, deeply enough to, like, see any, like, connotations with it. So, like, I think in general Mhmm. I think, you know, it's pretty well,
2012
02:48:45.850 --> 02:48:49.625
supported as as far as, like, we should probably do route blinding.
2013
02:48:50.404 --> 02:48:55.704
Yeah. It's really just the nitty gritty, getting into the details, and and finishing the spec off and
2014
02:48:56.380 --> 02:48:57.760
more experimentation. Yeah.
2015
02:48:58.220 --> 02:49:04.399
Well, alright. I've been trying to keep my mouth sipped a little more than, my panel the first day, but
2016
02:49:06.575 --> 02:49:07.875
just trampoline routing.
2017
02:49:10.815 --> 02:49:16.221
I kind of have an issue at a high level with just like the idea of outsourcing
2018
02:49:17.080 --> 02:49:19.900
the route construction to a third party because,
2019
02:49:20.545 --> 02:49:35.979
you know, in theory, you you can just kind of nest different trampoline nodes together and then have, like, the first one, you know, just get the route from you and then go on to the next one and the next one. And like any onion routed system, you you don't know,
2020
02:49:36.365 --> 02:49:41.186
like, if this is the final destination I'm routing to or another trampoline node.
2021
02:49:41.725 --> 02:49:42.865
But in practice,
2022
02:49:44.180 --> 02:49:51.479
you know, a a node doing trampoline routing and route selection is probably gonna be very publicly visible and known.
2023
02:49:51.825 --> 02:50:01.720
Oh, yeah. And you still have information like the, the time step for the, refund path in an HTLC to look at with a maximum length that can have.
2024
02:50:02.600 --> 02:50:04.779
And, like, all the the little metadata
2025
02:50:05.399 --> 02:50:08.220
that kind of piles up where it's like, well, in theory,
2026
02:50:08.735 --> 02:50:16.436
like, you can just link the different trampoline nodes together and they don't know, like, what the final destination is. But in practice,
2027
02:50:17.341 --> 02:50:22.721
you know, there there's probably gonna be some things you can suss out, like the length of the route. Obviously,
2028
02:50:23.420 --> 02:50:24.061
you know, if,
2029
02:50:24.795 --> 02:50:30.895
let's say Blockstream had a trampoline node and I go there first, but then route to async,
2030
02:50:31.274 --> 02:50:37.270
well, like, Blockstream's node is gonna see, oh, that's async's node. Like, that's just another trampoline hop.
2031
02:50:37.650 --> 02:50:38.150
So,
2032
02:50:39.115 --> 02:50:40.495
I mean, is is maybe
2033
02:50:41.915 --> 02:50:45.775
pitching that as a privacy solution kind of a a misnomer?
2034
02:50:46.290 --> 02:50:57.925
Is that not more of just a scaling solution for light wallets? Yeah. I think that might so I haven't looked at it closely. I would probably need to go back, but I think that that intuition is probably pretty good.
2035
02:50:58.945 --> 02:51:03.525
So, basically, the idea of the trampoline route is that you can,
2036
02:51:03.870 --> 02:51:05.970
if if you're using a trampoline route,
2037
02:51:06.430 --> 02:51:12.130
you don't have to understand how to get to every node on the network. So it saves you a lot of data as a node
2038
02:51:12.726 --> 02:51:16.345
because you can offload the path riding, the path finding,
2039
02:51:16.726 --> 02:51:19.306
like, responsibility to someone else in the network.
2040
02:51:19.770 --> 02:51:30.665
I think it's for a fee. I think you get paid if you do, like I think there's, like, some, like, little, like, earn some money by doing a trampoline route thing in there. I feel like an extra fee for constructing route for someone, a partial route, I should say.
2041
02:51:31.226 --> 02:51:36.365
So then the idea is that if you have, like, a mobile phone and a wallet and you wanted to send a payment from there,
2042
02:51:36.851 --> 02:51:43.910
you only need to know how to construct a route to get to a trampoline node and then you can get your payment sent from there. Like, then the trampoline
2043
02:51:45.345 --> 02:51:48.085
node will figure out how to send it to anyone else on the network.
2044
02:51:49.185 --> 02:51:49.685
Yeah.
2045
02:51:50.225 --> 02:52:07.245
Yeah. I know. So, like, I think, like, all of these things, like, these are, like, routing level stuff. Right? And so I think it's kinda interesting to talk, like, okay. What exactly what sort of data are you leaking, like, when you're routing a payment? Right? So we talked a little bit earlier, like, when you have an invoice, invoice is basically, like, the part of
2046
02:52:07.705 --> 02:52:08.525
figuring out
2047
02:52:09.930 --> 02:52:19.630
who to pay and how much to pay them and for what. Right? So it's, like, invoice level. And then there's, like, okay. Once you have the invoice, you use the invoice to, like, figure out the route you're gonna take to your payment.
2048
02:52:20.235 --> 02:52:30.290
And then once you've, like, figured out the whole route finding thing. Right? Maybe you're using trampoline and someone else is finding out the route for you. What data is in a route, you know, this route finding thing?
2049
02:52:30.830 --> 02:52:33.490
It's gonna be the amount of money that you're sending.
2050
02:52:34.436 --> 02:52:36.275
It's gonna oh, great. Thank you.
2051
02:52:36.836 --> 02:52:42.240
It's gonna be the amount of money that you're sending. Right? So you still wanna know, like, how much money you're sending and
2052
02:52:49.280 --> 02:52:50.905
hello? Okay. I think it's still on.
2053
02:52:51.945 --> 02:53:02.100
Great. So yeah. So there's kind of like that. Like, the the level of information that you got kind of is different sort of depending on where in the payment process, etcetera, that you're you bind yourselves. Right?
2054
02:53:02.739 --> 02:53:09.075
One thing that's kinda interesting is talking to Matt Goralu who works on Spiral, they do LDK stuff right before this is,
2055
02:53:09.875 --> 02:53:21.079
one of the current kind of issues with these, like, so payments. So when you send a payment across the network, usually, they're wrapped up in things called onions. Right? And so you do onion routing, which means that when you get a payment,
2056
02:53:21.779 --> 02:53:37.745
you can see who sent it to you and you can see where it's headed. But you as the person with the in the middle of this route have no idea where it came from before it got to you and where it's going after the next hop. Right? So we already have that level of, like, privacy and lightning that already exists. Yep.
2057
02:53:38.120 --> 02:53:39.580
We're talking about, like,
2058
02:53:40.360 --> 02:53:54.825
sort of, like, different levels of, like, ways you can make those route, those onions, and how do you make sure that maybe you don't know exactly who the last person is when you're constructing the onion. That's what blinded past due. That's what trampoline does in some sense, I think.
2059
02:53:55.950 --> 02:54:01.250
Yeah. Anyway, so, like, one of the things with, like, this this routing data then is, like, you wanna be able to hide
2060
02:54:01.551 --> 02:54:32.520
how far you've gone from the start point and how far you are from the finish. But there's some, like, there's kind of a tension here between that and, like, this other parameter that we send in these packets called the CTL v lock. Right? Lock time. So that you can kinda use I think, like, you can do I think, I think there are researchers that have done basically analysis on, like, the CLTV lock that kinda tells you how far you are in that path. So, like, if someone knows how many hops away you are, they can kinda look back and maybe figure out where you came from and where it's going, etcetera. So,
2061
02:54:33.140 --> 02:54:38.120
that's kind of like, okay, how do you that's like that those kinds of questions are like, okay, how do you
2062
02:54:38.705 --> 02:54:43.364
deanonymize or, like, figure out where a payment's going given that you didn't see the invoice, etcetera?
2063
02:54:43.904 --> 02:54:49.430
If you have the invoice, like I said, you usually know exactly where it's going. We're trying to fix this with the Bolt 12 stuff.
2064
02:54:50.210 --> 02:54:54.870
Bolt 12 use blinded path, so you'll be able to, as a receiver,
2065
02:54:55.235 --> 02:55:13.630
not tell people that you're the node being paid. You can instead provide a little bit of a route of how to get to you, and so you send that with the request to be paid. Person who gets the request to be paid will pay to the beginning of this path that you've constructed, so they don't see where it goes after it gets to that, like, start point, basically.
2066
02:55:14.455 --> 02:55:19.515
But that's all, like, payment level stuff. Sorry. I didn't Yeah. And then along along the same lines,
2067
02:55:21.015 --> 02:55:37.285
with with analyzing the c you know, the the time lock. You can even, like, analyze the timing too. So, like, if if, like, a payment normally takes, like, a certain amount, you know, per hop, and you can even, like, analyze how long each hops have certain network latency. You could even, like, try to, you know,
2068
02:55:37.750 --> 02:55:40.330
like, attempt to, like, figure out where in the network,
2069
02:55:40.870 --> 02:55:43.050
a node may have been sending from.
2070
02:55:43.430 --> 02:55:49.564
There's been some research on that level and then but on the flip side, there's been, a lot of research or at least like one paper
2071
02:55:49.865 --> 02:55:51.564
into how we can actually,
2072
02:55:52.904 --> 02:56:12.875
construct routes at the sender level to kind of take paths that are not the traditional path. That way, you know, if I'm always going through a couple of different nodes, you know, maybe maybe they can analyze that. Oh, well, it's probably coming from this location over here. Mhmm. They may not know exactly who's making the payment, but they can kinda make some educated guesses.
2073
02:56:13.230 --> 02:56:27.314
But what's cool is that you can actually, like, construct the you know, it's you construct the payment yourself and maybe that guide kind of goes along the lines of like, you know, maybe we shouldn't just like hand it off trampolines to construct the routes ourselves. But if individuals are able to do these, like, nontraditional,
2074
02:56:28.015 --> 02:56:36.750
you know, routing algorithms, pathing algorithms, then then we can actually, like, try to attempt to get, you know, better privacy and, you know, better heuristics there.
2075
02:56:37.689 --> 02:56:40.189
And so I think core lightning by default will
2076
02:56:40.585 --> 02:56:49.245
choose a more random path than just, like, the cheapest or most direct route. I think we use, like, a fee budget. So we give you a budget to try and get to there. And so
2077
02:56:49.580 --> 02:56:55.520
that way, trying to, like, kind of use not necessarily the most obvious way to make your payment happen,
2078
02:56:56.060 --> 02:56:56.880
which is cool.
2079
02:56:58.085 --> 02:57:00.425
Well, I mean, that that's just like
2080
02:57:01.365 --> 02:57:11.370
a a massive issue that I think is is really, are are we gonna be able to solve that one? Because, like, what that really boils down to is is, like, timing analysis.
2081
02:57:11.935 --> 02:57:14.675
I mean, if you zoom out and say
2082
02:57:15.135 --> 02:57:19.875
the NSA gets really interested in what's happening on the lightning network, well,
2083
02:57:20.480 --> 02:57:28.100
they can just watch everybody's nodes and, oh, that that string of packets, that's exactly the size that proposing an HTLC
2084
02:57:28.400 --> 02:57:28.900
messages.
2085
02:57:29.285 --> 02:57:32.025
Oh, and then and then something zipped back the other way?
2086
02:57:32.405 --> 02:57:35.545
Oh, okay. Did, you know, did that confirm or refund?
2087
02:57:36.165 --> 02:57:49.145
And just watch the the packets and go, well, the whole protocol is spec'd out. Like, you you know exactly, like, what the size of adding an HTLC is, removing it, like a pre image flowing back through the route
2088
02:57:49.685 --> 02:57:50.585
and okay,
2089
02:57:52.245 --> 02:57:53.305
like, oopsies.
2090
02:57:54.950 --> 02:58:01.851
Yeah. Go ahead. Yeah. It's just a major problem. So a nation state actor with that god level view of the network and
2091
02:58:02.564 --> 02:58:04.665
ascertain, like, some serious information.
2092
02:58:05.045 --> 02:58:05.545
And,
2093
02:58:06.245 --> 02:58:07.705
you know, there's been some
2094
02:58:08.165 --> 02:58:14.300
ideas as to how to throw some extra noise into the network to sort of obfuscate what's actually happening.
2095
02:58:15.560 --> 02:58:19.615
But, you know, that all comes with additional cost. Right? You know, it's already tricky
2096
02:58:20.155 --> 02:58:24.655
to run a node, processing a lot of packets, you're moving a lot of Sash around too especially.
2097
02:58:25.355 --> 02:58:29.240
And, we need to acknowledge that, you know, with these ideas that
2098
02:58:29.860 --> 02:58:30.760
are being proposed,
2099
02:58:31.620 --> 02:58:33.479
it's gonna increase the cost of
2100
02:58:34.020 --> 02:58:34.760
node operation.
2101
02:58:37.025 --> 02:58:41.105
And, well, I guess, you know, not not to put you on the the spot, Anthony, but,
2102
02:58:42.145 --> 02:58:43.686
I I hear you have a little
2103
02:58:44.145 --> 02:58:44.645
project
2104
02:58:44.950 --> 02:58:47.450
going on, in regards to testing
2105
02:58:48.230 --> 02:58:48.390
the,
2106
02:58:49.350 --> 02:58:52.090
the privacy and effect of, unannounced channels.
2107
02:58:52.655 --> 02:58:53.155
Yeah.
2108
02:58:53.535 --> 02:58:58.595
So about a year ago, I wrote a paper on Lightning privacy. And as I was, you know, just really just documenting,
2109
02:58:59.135 --> 02:59:02.520
when I knew about it, I learned, I learned quite a lot doing that. And,
2110
02:59:03.140 --> 02:59:05.080
you know, one of the things is like, we call,
2111
02:59:05.620 --> 02:59:06.760
private channels private.
2112
02:59:07.404 --> 02:59:22.050
But they're they're really they're really not. They're more along the lines of unannounced channels. So whenever I'm a node and I have, you know, let's say I have all private channels, if I wanna receive down them, I create an invoice and I give that invoice to other people to to pay me.
2113
02:59:22.465 --> 02:59:30.085
I basically have to, like, docs my, you know, unannounced channel. So with that unannounced channel, they can see the UTXO,
2114
02:59:30.890 --> 02:59:36.590
the unspent transaction output that went into that channel. And then from there, you kind of have the leakage
2115
02:59:37.050 --> 02:59:38.329
of of all the things from,
2116
02:59:38.805 --> 02:59:46.780
that can be leaked on Bitcoin privacy like on chain. Some of that follows and kind of flows into the value network as as an inherent,
2117
02:59:47.160 --> 02:59:49.340
you know, problem for privacy as well. So,
2118
02:59:50.040 --> 02:59:58.125
one of the things you can actually do is, you know, probing on the lightning network. Because actually I don't I I consider it kind of a big problem in the space.
2119
02:59:58.744 --> 03:00:07.180
I don't like that probing happens. I, you know, I don't like that it kind of is, you know, allows that, but probing is basically sending a whole bunch of fake information
2120
03:00:07.480 --> 03:00:10.940
and finding information that is not, like, traditionally public.
2121
03:00:11.386 --> 03:00:12.525
So it could be balances.
2122
03:00:13.386 --> 03:00:19.245
In my case, what I'm trying to do right now and and I did a hackathon with Paul Miller in Austin a few weeks ago,
2123
03:00:19.921 --> 03:00:22.500
where we're kind of proving this out with the LDK toolkit.
2124
03:00:22.960 --> 03:00:24.421
You can actually probe,
2125
03:00:24.960 --> 03:00:30.915
4 private channels to see if they exist between 2 nodes. If me and me and Evan here have a private channel,
2126
03:00:31.455 --> 03:00:33.556
so I can also tell them about that.
2127
03:00:35.136 --> 03:00:41.979
If, if we have an unannounced channel together and say it's, like, for, like, 10 Bitcoin because, like, you know, we're really rich peoples. You know? So,
2128
03:00:42.439 --> 03:00:48.375
it's not to say it's, like, for a huge amount. It's all on his side. He he opened up the channel. I'm doxxing you, bro. This is so bad.
2129
03:00:48.676 --> 03:00:54.615
You you can actually you know, if I'm connected to the general lightning graph, you can actually try to probe
2130
03:00:55.030 --> 03:01:11.085
through through my channel and, like, try to attempt to guess the UTXO that is between us. And if you're able to guess the UTXO between us, there's a different error message that it gets, like, sent backwards. So you kind of get into a situation where, like, once it proves it out,
2131
03:01:11.979 --> 03:01:24.524
you know, once you actually probe all the way through, like, you create this fake payment in a way where, like, Evan basically has to come back. His node will come back and say, give it an error message. Like, I can't I can't redeem this fake payment that you made.
2132
03:01:24.825 --> 03:01:50.630
So so but the fact that he is the one that gave that error message, like, proves out that there is this unannounced channel between us. And and from there, you know the amount, you know, the UTXO, the addresses it's associated with, and, like, all of that is, like, possible today. And and me and me and Paul finally, like, took the time to actually, like, create a proof of concept of doing that, and I'm hoping to, run that over the next couple months and, you know, release,
2133
03:01:51.250 --> 03:02:07.569
release what my findings there. Because it's like, you know, we can, you know, we we love lightning. Right? I think that's I think, you know, a lot of us here really love, you know, some of this stuff and it's like, if this is possible, I want it to be like revealed. Like if if if if I can do this,
2134
03:02:08.029 --> 03:02:10.529
you know, multibillion dollar firms can do this,
2135
03:02:11.229 --> 03:02:19.095
you know, triple letter agencies can do this. So I would rather us do this and find this information out and try to make the lighting network better.
2136
03:02:19.875 --> 03:02:22.055
Yeah. I mean, there there's no security
2137
03:02:22.355 --> 03:02:23.815
in this security theater.
2138
03:02:27.920 --> 03:02:28.960
But yeah. I mean
2139
03:02:30.720 --> 03:02:37.295
yeah. If if it breaks, let's break it now while things can still be fixed instead of 5 years from now when
2140
03:02:38.155 --> 03:02:43.180
who knows how many countries are are trying to plug into lightning and use that as payment rails.
2141
03:02:44.140 --> 03:02:45.040
Yeah. That But,
2142
03:02:46.620 --> 03:02:49.840
kind of a related, but little little hard shift here.
2143
03:02:50.895 --> 03:02:55.455
Who wants to talk about the, gossip protocol and routing tables and,
2144
03:02:56.815 --> 03:02:58.035
figure out why
2145
03:02:58.780 --> 03:03:00.880
we still explicitly docks
2146
03:03:01.340 --> 03:03:02.080
the UTXO
2147
03:03:02.620 --> 03:03:10.155
associated with with a public channel so that the whole world can just follow where those coins go after channels close?
2148
03:03:11.415 --> 03:03:16.710
So this is like so I would call this, like, a different level of privacy. Right? So what we've been talking about beforehand
2149
03:03:17.170 --> 03:03:21.350
is, like, payment level privacy. Like, I wanna make a transaction on Lightning,
2150
03:03:21.835 --> 03:03:28.335
and so we've been talking about some of the, like, pros and cons in sending invoices to people and then sending payments, etcetera.
2151
03:03:28.770 --> 03:03:32.851
This is kind of so this level of privacy that we're talking about is, like, gossip
2152
03:03:34.051 --> 03:03:46.130
the gossip network and UTXO level is more like what kind of so the information that you are leaking or finding out the privacy here is which UTXOs or, like, outputs in Bitcoin
2153
03:03:46.590 --> 03:03:50.529
belong to which nodes, right? So it's tying on chain
2154
03:03:51.149 --> 03:03:52.449
outputs and balances,
2155
03:03:53.875 --> 03:04:02.136
to, like so basically the account balance of any one Lightning node, how we use that to figure out, what kind of implications does that have.
2156
03:04:02.590 --> 03:04:07.010
So I think it's kind of interesting actually that, like, this information is, like, completely separated
2157
03:04:07.630 --> 03:04:10.850
to a large extent from your transaction data, right? So,
2158
03:04:11.226 --> 03:04:13.085
that's a big contrast from transacting
2159
03:04:13.865 --> 03:04:14.525
on chain.
2160
03:04:15.865 --> 03:04:21.520
When you make payments using on chain Bitcoin, that becomes public record for everyone whereas when you're transacting
2161
03:04:22.061 --> 03:04:22.721
on Lightning,
2162
03:04:23.341 --> 03:04:45.740
it's ephemeral. People kind of have to be watching for your stuff to go through or, like, constantly monitoring balances, etcetera, to even see the payments moving, etcetera. Anyways, this is like gossip stuff. The way that Lightning works is for these are for announced or public channels. Right? Unannounced channels kind of escape this. When you make a Lightning channel, you're creating an on chain transaction
2163
03:04:46.120 --> 03:04:48.220
that creates a UTXO output.
2164
03:04:48.645 --> 03:04:52.266
That UTXO output contains the balance of the channel.
2165
03:04:52.645 --> 03:04:55.705
What so there's 2 parties in a Lightning channel.
2166
03:04:57.210 --> 03:05:01.710
Who owns what amount of that total balance is, like, kind of an open question.
2167
03:05:02.570 --> 03:05:06.726
That's what you might use the probing stuff that we were talking about earlier to figure out.
2168
03:05:07.585 --> 03:05:09.205
But the on chain transaction,
2169
03:05:09.825 --> 03:05:10.726
like, typically,
2170
03:05:11.510 --> 03:05:18.649
if you're using the version 1 of, like, channel opens, usually, that balance is all on one side to start with, generically speaking.
2171
03:05:19.305 --> 03:05:21.005
Anyways okay. So you have these UTXOs.
2172
03:05:21.625 --> 03:05:43.024
It would be all great and good if you didn't have to tell it. You could open a channel, and you don't tell anyone that you made a UTXO on main chain. That's what an unannounced channel is. But it makes it really hard for people to use that channel to do routes for payments if you don't tell them about it. So if you were trying to start up a lightning node and earn money routing payment traffic from your node to someone else's,
2173
03:05:43.325 --> 03:05:51.609
you would need to publicly announce them. The way that you publicly announce them is via something called the gossip network. Where is it gossip network? Do we call it the gossip network?
2174
03:05:52.905 --> 03:05:56.925
Like Well, we don't wanna inflate people with it being with lightning network.
2175
03:05:57.465 --> 03:06:12.265
But, yeah, it's definitely a distinct part of the system for sure. Yeah. So there's this, like, gossip thing where basically you make a message and you say, hey. This is me. This is my channel buddy. Here's our pub keys that we put into the, like, on chain transaction
2176
03:06:13.444 --> 03:06:16.585
somewhere. Here's where you can find it on chain.
2177
03:06:17.524 --> 03:06:23.420
Go verify verify it before you use this as a route. So this is what we're talking we're talking about routing table.
2178
03:06:23.721 --> 03:06:34.995
The routing table is basically a list of all of these on chain transactions and the current balance like, the balance the total balance of the channel, right, and who is party to that. Right? So if you have all these balances
2179
03:06:35.610 --> 03:06:45.405
and all these node connections, you can build a connected graph with balances, and then if you want to send a payment, you can look at this graph of data and figure out how to get
2180
03:06:45.886 --> 03:06:48.865
from Tony's node to that guy's node,
2181
03:06:50.205 --> 03:06:50.705
and
2182
03:06:51.165 --> 03:06:52.945
go through the graph that way.
2183
03:06:53.659 --> 03:07:01.279
But the downside to that is that you're telling people where your on chain transactions are and you're associating them with your node ID,
2184
03:07:02.415 --> 03:07:07.476
And this is public data that anyone running a everyone running a Lightning node is hopefully getting,
2185
03:07:08.335 --> 03:07:11.761
so if there's if you're an organization like, Chainalysis
2186
03:07:12.141 --> 03:07:13.200
or some other,
2187
03:07:13.740 --> 03:07:24.145
such organization that has a large body of output data like chain, like on chain data, and they've been working really hard to tie identities to those on chain payments.
2188
03:07:25.090 --> 03:07:34.595
Now they already know kind of what some of your transaction history had been and then you tie it, you put it on a lightning node, and then you use that to open a channel,
2189
03:07:34.895 --> 03:07:48.580
all of a sudden, someone who's, like, managed to figure out your identity in another arena now knows which lightning node is yours and which channel like, what your balances are in the network. So that's like a little kind of, I think, further out. Anyway, so gossip is like,
2190
03:07:49.601 --> 03:07:53.365
really bad for on chain privacy, especially if you're trying to route.
2191
03:07:55.104 --> 03:07:56.564
Yeah. And, Rusty,
2192
03:07:57.265 --> 03:08:01.630
you your coworker actually has a new proposal to kind of fix that where
2193
03:08:02.091 --> 03:08:05.630
instead of explicitly doxing the channel UTXO
2194
03:08:05.931 --> 03:08:08.270
and associating it to a specific
2195
03:08:08.730 --> 03:08:09.230
channel,
2196
03:08:09.865 --> 03:08:12.045
a node can just take one UTXO
2197
03:08:12.425 --> 03:08:15.805
and prove, like, I'm a node. I have real Bitcoin,
2198
03:08:16.510 --> 03:08:20.609
and then not have to specifically connect it to their channels
2199
03:08:21.149 --> 03:08:33.105
so that, you know, opening and closing, that that's not leaked. They just have their their one little bit of Bitcoin to prove, like, I actually have money to route, but I'm not gonna tell you the UTXOs to my actual channels.
2200
03:08:33.570 --> 03:08:40.550
Yeah. And this, like and so this is the kind of things like that. I think Rusty's proposal is a sort of thing that we would also need to adopt
2201
03:08:40.865 --> 03:08:48.725
before you get any privacy improvements for Taproot. Right? Because so for those of you who aren't familiar with Taproot, it basically
2202
03:08:49.250 --> 03:08:53.990
makes it such that a lightning channel goes from having a very specific on chain footprint
2203
03:08:54.370 --> 03:08:59.535
to being, like, a single signature and looking like kind of any other, like, output on chain.
2204
03:09:00.715 --> 03:09:08.330
But without changing the way that our gossip and our route table building stuff works, it's going to be very difficult to,
2205
03:09:09.830 --> 03:09:21.205
stop publishing that information anyways. But okay. But, like, so Rusty's proposal though then, like, the other consequence of this is you use gossip. The reason you do the gossip stuff, right, is so that you can build the route to send the payment.
2206
03:09:21.665 --> 03:09:28.080
If we move away from publishing exactly how much money exists between 2 parties,
2207
03:09:28.460 --> 03:09:34.865
how are you supposed to figure out where you can send payments or where there's, like, capacity to send your payment. Yeah. Route route finding becomes
2208
03:09:35.405 --> 03:09:36.225
very difficult.
2209
03:09:37.325 --> 03:09:42.090
Well, I I think that, like, Rusty's proposal has a pretty elegant solution. It's just
2210
03:09:42.570 --> 03:09:47.229
have, like, an amount for the the UTXO you're tying to your node,
2211
03:09:47.689 --> 03:09:56.006
and then some multiple of that is how much you're allowed to advertise in terms of, like, channels. It's like you have, like, 1 Bitcoin locked up. Maybe
2212
03:09:56.705 --> 03:09:58.806
you can advertise, like, 10 Bitcoin
2213
03:09:59.420 --> 03:10:03.040
as channel. That sounds like fractional reserve lightning to me.
2214
03:10:04.220 --> 03:10:05.600
I don't I don't want that.
2215
03:10:06.425 --> 03:10:12.845
Oh, but, I mean, I mean, seriously, it's it's I think that is an elegant solution because the reality of
2216
03:10:13.465 --> 03:10:30.814
why you docks these UTXOs in the first place is literally just to prove, like, you actually have control of Bitcoin so that my wallet isn't spinning the wheel all day trying to route payments through people who don't actually have channels that, you know, there's no way to route a payment through.
2217
03:10:31.274 --> 03:10:38.641
And I I think that this would work. And and, you know, people concerned about denial of service or just, like,
2218
03:10:39.020 --> 03:10:41.200
the the multiple being way overblown.
2219
03:10:42.296 --> 03:10:42.796
Well,
2220
03:10:43.415 --> 03:10:45.436
you know, just set it up as a curve.
2221
03:10:45.895 --> 03:10:51.195
Like maybe you you toss 0.1 bitcoin on there. Okay. Maybe you can only advertise 0.2.
2222
03:10:51.760 --> 03:10:57.859
But if you get up to throwing a whole Bitcoin on there, maybe, you know, 5. Like, just adjust that curve
2223
03:10:58.479 --> 03:11:22.165
to kind of prevent, like, being able to just pretend you have a 1,000 Bitcoin when you you just have 1. So what tier you are in the federal banking system depends on, like, how much capital you have on chain. I'm like Yeah. I mean, it sounds it sounds like it'll trend towards centralization almost at that point where we have major hubs, and we're not really, like, you know, locking up at at the at the other layers. So I don't I don't know.
2224
03:11:23.105 --> 03:11:36.320
Yeah. It is it is it is a potential solution. I think, like, for, so we're talking about, like, how to do this for, like, public channels, but I think there is, like, one thing to maybe, you know, explain here is that there is some work right now
2225
03:11:36.655 --> 03:11:37.475
on actually
2226
03:11:37.775 --> 03:11:45.740
untying the unannounced channels from the UTXO right now. So there's a short channel ID aliases that is being worked on,
2227
03:11:46.300 --> 03:11:47.920
by a few different teams, I believe,
2228
03:11:48.620 --> 03:11:52.880
where you can actually, like, between me and my channel partner,
2229
03:11:53.955 --> 03:12:01.415
we come up with this scheme where we make a fake alias for our channel ID that is not directly derived from the UTXO
2230
03:12:01.716 --> 03:12:07.080
information. And then if we do that, then, you know, we are the ones that are aware of this. So I share,
2231
03:12:07.460 --> 03:12:33.875
you know, an invoice with with my routing hints in there. It gets it gets to Evan. And then from there, Evan knows this, like, fake, you know, channel ID between us, so he just goes ahead and sends it to me. And then from there, it becomes exponentially harder or, like, almost, you know, impossible to guess that short channel ID. And even if you guessed the fact that, you know, me and Evan had a channel together, you wouldn't necessarily or you wouldn't even be able to get the,
2232
03:12:34.355 --> 03:12:36.535
the UTXO amount or the other information
2233
03:12:36.960 --> 03:12:39.620
associated with UTXO. So I think there's some great,
2234
03:12:40.160 --> 03:12:43.859
you know, privacy improvements for, short channel alias IDs,
2235
03:12:44.240 --> 03:12:45.525
that I'm excited about.
2236
03:12:46.645 --> 03:12:47.945
But, I mean, you you
2237
03:12:48.565 --> 03:12:53.065
like, the public channel still needs to be addressed. Like, you know, one of the,
2238
03:12:53.801 --> 03:12:55.740
I think, key points in that massive,
2239
03:12:56.520 --> 03:13:01.101
privacy article you wrote is if you have a private channel, well,
2240
03:13:01.655 --> 03:13:07.515
you're receiving money through it. So whoever you open that channel with, probably has a bunch of public channels,
2241
03:13:08.055 --> 03:13:09.835
and eventually that's gonna close.
2242
03:13:10.290 --> 03:13:17.750
So if if that private channel closes and they still have a balance on their side and that winds up later in a public channel,
2243
03:13:19.024 --> 03:13:26.645
it's you can very easily deduce, okay, that last transaction was a private channel closing and now your UTXO with that balance
2244
03:13:26.950 --> 03:13:30.650
can be followed on chain. It's okay. This is probably involved in lightning.
2245
03:13:31.351 --> 03:13:42.716
Yeah. Exactly. And then and then on that note, if there is, it it even works both ways. If that private channel, like, you know, it gets closed and there's some on one end, some on the other, and they both open the public channel,
2246
03:13:43.256 --> 03:13:46.395
with other nodes, you even can tell the exact channel
2247
03:13:47.120 --> 03:13:50.500
between the two nodes that there was probably a private channel between.
2248
03:13:51.040 --> 03:14:00.085
So like, yeah, you There's all kinds of on chain analytics and that's one of the things I wanna eventually do with this with this project I'm working on right now where, like, I actually try to analyze
2249
03:14:00.466 --> 03:14:08.390
all the possible UTXO's that may be associated with a node and start at that point instead of just brute forcing through every, Paydoo public,
2250
03:14:08.850 --> 03:14:11.510
script hash on the on the network. So,
2251
03:14:12.095 --> 03:14:22.921
so, yeah, there's a lot of, like, weird on chain analytics that you can kind of link back to a to a specific node, and that's that's one of them. Will Taproot help with that? I think I think Taproot,
2252
03:14:25.061 --> 03:14:26.841
I think there will still be that UTXO
2253
03:14:27.575 --> 03:14:36.635
that could end up in public channels. And then if we if Taproot can't help with the public channel aspect of it, then that's still vulnerability. I think one of the things I'm excited about,
2254
03:14:37.030 --> 03:14:42.630
with Taproot and privacy that I think we can, you know, start, you know, slowly incrementing towards is the ability to,
2255
03:14:43.925 --> 03:14:46.825
you know right now, I can look at all the, you know, pay to,
2256
03:14:48.005 --> 03:14:53.290
public script am I saying that correct? I always screw up the initials there. Pay Pay to what? Pay to
2257
03:14:53.671 --> 03:15:03.426
witness script hash. Yeah. I could look at all the pay to witness script hashes and try to, like, use that as my baseline Mhmm. For brute forcing all these all these unannounced channels.
2258
03:15:03.965 --> 03:15:19.055
But if everyone starts moving towards Taproot and everything looks like a normal spend, even even, like, channel openings and and and, cooperative channel closings, then it makes it a lot harder to it's a it's a bigger set that I have to brute force or anyone has to brute force,
2259
03:15:19.515 --> 03:15:24.495
if we start, like, in general and if the Bitcoin space starts adopting Taproot even more.
2260
03:15:25.080 --> 03:15:29.660
Yeah. It's gonna be a great step in the right direction to get Taproot channels. I feel like we'll get them this year.
2261
03:15:30.200 --> 03:15:35.375
Obviously, it doesn't solve everything, but, it's a nice foundation to work off of for sure.
2262
03:15:40.170 --> 03:15:42.750
Any wild card topics in the last 2 minutes?
2263
03:15:43.529 --> 03:15:46.670
Oh, I just wanna make, like, kind of a public service announcement
2264
03:15:47.186 --> 03:15:52.965
that if you are paying an invoice with lightning and you're using a centralized service
2265
03:15:53.426 --> 03:15:55.125
that's not your node,
2266
03:15:55.670 --> 03:16:01.850
you are leaking your payment data. So none of the stuff that we talked about about, like, timing analysis or,
2267
03:16:02.229 --> 03:16:04.890
like, looking at payment traffic flow or probing
2268
03:16:05.350 --> 03:16:08.155
is is gonna matter because you've just told someone
2269
03:16:08.695 --> 03:16:19.100
who you're paying and how much and why. So, like, one thing this is why we're really excited on core lightning about Bold 12 is that it makes it possible to
2270
03:16:19.560 --> 03:16:23.979
hide a lot of that information and still have someone else make a payment on your behalf.
2271
03:16:24.936 --> 03:16:27.595
You know, that that is actually a really good point.
2272
03:16:31.255 --> 03:16:36.301
When when you're using the Lightning Network yourself, like your own node, your own channels,
2273
03:16:36.681 --> 03:16:57.000
there is that asymmetry where the sender is extremely private. Like, that whole dynamic is very private and receiving is not. And when you're dealing with a custodial wallet, it's almost the inverse. Like, you're leaking everything about who you're paying to that custodian, but when you hand out an invoice, all anybody can tell is they're using this wallet.
2274
03:16:57.460 --> 03:17:04.455
Yeah. And and to even further expand on that, like, you I could have my own node, you know, not using any custodial services or anything.
2275
03:17:04.835 --> 03:17:28.154
And if I, like, put in my invoice, like, this is for drugs, and I give that to a strike user, Strike can associate my public key with drugs, and that and that, you know, could put me on a blacklist of some extent. So, like, even if and I give an invoice, I don't know how they're gonna pay me. So like they pay may pay with their node or they pay with strike and if But if they paid with strike or another custodian then now they link me to drugs and that's that's no bueno.
2276
03:17:29.900 --> 03:17:30.220
So,
2277
03:17:31.500 --> 03:17:40.915
yeah. I guess last note, don't use custodial wallets that take your personal identifying information and buy drugs on the Internet, but, we're out of time. So,
2278
03:17:41.295 --> 03:17:43.555
thanks everybody for doing this. This was a blast.
2279
03:17:56.654 --> 03:17:57.635
Some friends in
2280
03:17:58.095 --> 03:17:58.675
the audience.
2281
03:18:00.400 --> 03:18:03.780
Okay. Cool. Is this thing on? Okay. Great. So side chains,
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:13:16 PM
Duration: 16732.84
Channels: 1
1
00:00:04.640 --> 00:00:10.125
2
00:00:13.225 --> 00:00:17.545
We have you know, I'm let me try and think of some of the panels we set up. We have,
3
00:00:18.310 --> 00:00:21.369
the next one coming up is gonna be coin joins and coin swaps,
4
00:00:22.710 --> 00:00:24.890
lightning privacy, lightning payments.
5
00:00:25.835 --> 00:00:28.735
We have a side chains panel, a mempool panel.
6
00:00:29.835 --> 00:00:32.575
So an absolute fire lineup for today.
7
00:00:34.830 --> 00:00:38.290
Keep the high signal content going over here on the open source stage.
8
00:00:39.310 --> 00:00:45.695
Once again, I just want to thank everybody who helped make this happen. I mean, there's a team of
9
00:00:47.035 --> 00:00:50.815
10, 20 people back there that no one sees. I make sure all this
10
00:00:51.120 --> 00:00:51.860
goes smoothly.
11
00:00:52.480 --> 00:00:54.740
We got all these production guys in the back.
12
00:00:55.840 --> 00:00:57.460
Really couldn't do without them.
13
00:01:00.645 --> 00:01:03.065
We also have a panel today on
14
00:01:03.844 --> 00:01:04.985
open source funding
15
00:01:05.845 --> 00:01:07.625
and raising money for developers.
16
00:01:08.310 --> 00:01:10.330
If you were here yesterday, I talked about,
17
00:01:10.950 --> 00:01:12.250
my initiative at opensats.org.
18
00:01:13.670 --> 00:01:15.530
My cofounder will be on that panel.
19
00:01:17.135 --> 00:01:18.515
What I didn't mention
20
00:01:18.975 --> 00:01:20.435
and that I should have mentioned
21
00:01:21.135 --> 00:01:22.275
is that
22
00:01:23.270 --> 00:01:27.850
we are accepting applications for projects and contributors to be listed on opensats.org.
23
00:01:28.230 --> 00:01:30.490
So if you are a contributor, if you are a developer,
24
00:01:31.535 --> 00:01:36.675
or you're a maintainer of a project, make sure you submit it so we can get you listed. We have some people listed already.
25
00:01:37.135 --> 00:01:43.070
So you can go to opensats.org. You can donate to our general fund where we contribute a 100% of the proceeds,
26
00:01:44.090 --> 00:01:54.155
to board selected projects, or you can actually choose the individual projects you want to do. Now, when you go to that donation page, some people said, oh, it says email name is required.
27
00:01:54.534 --> 00:01:56.315
That's only if you check the tax deductible.
28
00:01:56.740 --> 00:02:03.240
If you check non tax deductible, you don't have to provide us any information. You can just donate SATs directly to the cause.
29
00:02:05.605 --> 00:02:09.065
What else do I have on my homework that I'm supposed to talk about right now?
30
00:02:09.445 --> 00:02:12.265
We have raspi blitz auction happening
31
00:02:12.780 --> 00:02:13.760
at 3 o'clock.
32
00:02:14.540 --> 00:02:17.920
There's gonna be 3 Raspberry Pi Blitz nodes available for that.
33
00:02:18.620 --> 00:02:23.195
Proceeds of that auction will go 50% to Open Sats, 50%
34
00:02:23.495 --> 00:02:25.035
to RASPY blitz development.
35
00:02:25.975 --> 00:02:29.835
So if you want a really nice hardware node,
36
00:02:30.295 --> 00:02:31.995
consider coming for that,
37
00:02:32.810 --> 00:02:35.230
and supporting a good cause at the same time.
38
00:02:37.770 --> 00:02:40.270
I just wanna say that, you know, these last
39
00:02:41.135 --> 00:02:46.755
3 days, I mean, it's been 6 months in the making, 8 months in the making, has been extremely rewarding.
40
00:02:48.070 --> 00:02:49.690
You know, this is a global movement.
41
00:02:50.550 --> 00:02:54.890
A lot of times, people get caught up in a lot of drama and a lot of bullshit.
42
00:02:55.635 --> 00:02:59.175
But at the end of the day, we have passionate people around the world,
43
00:03:00.195 --> 00:03:01.975
that are moving this mission forward,
44
00:03:02.490 --> 00:03:04.670
that are contributing to open source projects,
45
00:03:05.130 --> 00:03:06.670
that are contributing to code,
46
00:03:06.970 --> 00:03:08.590
that will outlive all of us,
47
00:03:09.290 --> 00:03:12.625
and we can't do it alone. So being able to meet all of you,
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talk to you in person,
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is just really one of the most rewarding
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rewarding things. And I know it can feel exhausting at times. It can feel overwhelming.
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But, one step at a time. You know? We get through it together. And, I really do think,
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we can we can make the world a better place in a very actionable way. You know?
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So appreciate all of you.
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Unfortunately
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well, fortunately and unfortunately,
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I've been
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basically in this room
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all 3 days, so I haven't been to the main stage.
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But there was some really great talks that I heard about yesterday
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that I do if, you know
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these things, it's very hard to
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view all the content in person, so do consider checking out all the video on demand after the fact. Everything was recorded in high quality.
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I know Foday
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had a really great keynote yesterday,
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talking about his new Bitcoin
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Africa conference, which I'm really excited about. I really like
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this this blossoming communities that are happening in the developing world. They're extremely powerful.
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Had a absolutely insane freedom panel,
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that really is what this movement is about.
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So go check that out. And, of course, the guy who stole the show,
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Mahler's, Jack Mahler's had his announcement about
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nearly 50% of US merchants
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starting to accept Lightning with no KYC,
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payable from any Lightning wallet.
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And we have 2 panels today,
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Lightning Privacy and Lightning Payments,
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that are gonna be highly relevant to that conversation, so the timing could not be better.
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Anyway, with all that said,
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I love you all.
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We're gonna fucking do this thing. I hope you enjoy today.
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Huge thank you to the Bitcoin Magazine team for
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putting this all together
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and getting this this fantastic space.
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Huge thanks to our sponsor, Cash App, who also helped make this happen. This was this is not cheap. This is not cheap, and I really do appreciate it.
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And thank you to all our open source contributors
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and all around the world, especially those who couldn't make it. Appreciate you all. Let's do this.
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Glad to be back here in Miami. I'm, humbled and honored to be presenting this this panel with this great cast of builders over here. It's a very important panel on CoinJoin and
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CoinSwap, which are some, you know, essential tools that,
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we can use to give Bitcoiners privacy on chain.
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My name is Evan Kaludis.
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I'm an application developer. I'm the founder of Zeus, a lightning wallet,
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and,
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I've got quite quite a cast here today. Let's let's start from the left. I got,
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Ben Carmen
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from Bitcoin Company.
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You've been working on some stuff with
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coin joins and lightning. It's called Ellen Vortex. Right? Yeah. Yeah.
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open up lightning channels inside of a coin join,
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and so hopefully, we're actually launching it soon.
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Next, we got Craig Roth from,
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Sparrow Wallet, which is my favorite way to manage my on chain funds.
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He's recently added support for, doing samurai Whirlpool coin join transactions,
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and,
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you've also got, like, payment stuff in there. Yeah. So it's really cool to see another wallet,
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implement those, 2 tools, and
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it's gonna be fun to get into that in a bit.
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Next up, we got Fontaine. How are you doing today, Fontaine? Good. And you?
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Great.
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So, Fontaine, you've got a iOS application fully noted,
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and, you've recently
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implemented a UI in there for managing,
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CoinJoin instances,
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or join market instances, which are a form of CoinJoin,
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that use, like, a maker taker model. Right? Correct.
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Excellent stuff. Really excited to have more tooling,
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more UI for joint market. So that's great.
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And, last up, we got Nick Gregory,
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from Mercury Wallet.
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He has a new product.
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It's a it's a state chain wallet that performs coin swaps. It's quite a bit different from,
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CoinJoints,
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but I I was been messing around with it this week, and I've been loving the experience so far. So excited to get into that as well.
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So, yeah, I I don't think we really gotta get into why Bitcoin privacy is too
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is important in in this volatile world where we're seeing,
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you know, people getting deplatform from platform from,
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different,
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accounts and,
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all the turmoil in the world
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between, you know, people in Ukraine and Russia,
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dealing with their governments and the situation there.
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People living just generally under authoritarian regimes and,
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you know, more closely, what what's happened in Canada with the the trucker protest
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and,
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you know, the scrutiny that people have gotten after, you know, making these Bitcoin
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driven donations. So
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let let's kick into
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the difference between,
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CoinJoin and a CoinSwap.
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You know, there's a lot of similarities,
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but very distinct methods of, you know,
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getting, on chain privacy. So anyone wanna give us, like, a good overview of, you know, what a coin join really is, what it consists of?
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Bitcoin is nonfungible.
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Right?
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So we wish that we had non we we wish we had nonfungibility
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at a protocol layer. We don't have that. So we have to address that on application layer,
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and both coin joins and coin swaps are attempts to do that.
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They differ in the sense that, with a coin swap, you are effectively swapping out one coin's history for a different coin's history.
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So for example, you may have 2 coins of the same size, and then you're trying to say, well, I'm going to swap my history with yours, for example, Evan. With a coin join,
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what we have is a number of,
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different participants come and they join together
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to basically create what we call, for the most part, an equal output coin join where we have a set of inputs and a set of outputs. And the outputs are all the same size. And if they're all the same size, then it's very difficult to tell where the ownership of funds went after the fact. So particularly, if we have multiple rounds of coin joins, we have this anonymity set which builds over time.
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So we are the so the chief difference between the two is that instead of swapping
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one person's history or one kind of individual's history for a different history,
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what we have is swapping your history for the entire coin join and a nimbit nimbitiset that you are taking part or at least that part that applies to you. And that's the kind of the difference as I see it between the 2.
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coin swaps,
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at least in in the case of Mercury Wallet, are being built off of, a state chain. Nick, would you wanna get into,
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lightning network, but
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it was an idea that was drafted in a paper written by Ruben Sanson in 2019.
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And it's a way of basically transferring
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your private keys or new TXOs
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off chain.
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And yeah. So we we built the first version of this and
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essentially we swap the coins and we swap the private keys and it's non custodial.
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So the first use case was coin swap.
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Now, it is different than coin join in that, you know, you're essentially swapping history.
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So there are some positives. The positives are is that there's no one chain chain of a coin join. The negatives is that you could end up with a undesirable coin, for example.
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To deal with that issue, we we build a sparse Merkle tree of all the coin swaps. So if you were ever in a situation where you coin swapped with a coin that you don't necessarily wanna have, you could prove that you participated in the coin swap because we've attested to the Bitcoin network. So
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so as
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a
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So essentially these open dimes now we can swap them. So long as they've got the same denomination,
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we swap them using a similar protocol to the 0 link, but
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so we don't know who's swapped with who. But as part of our state chain implementation,
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we provide a kind of coordination service, which swaps these kind of virtual open dimes or UTXOs.
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for example, from, like,
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you know, state actor, would you guys be able to blacklist,
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UTXO's from participating?
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coordinators,
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because
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if people misbehave, that's a DDoS attack. So if someone was to participate in
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a coin swap and constantly not, you know, let the coin swap complete. Yeah. Like join the round and exit out just to, like, throw off the process so that less coin is getting mixed. So we had to implement that coin swap anyway. But long term, we're looking at making the coin swap more blinded.
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We're looking at integrating with Lightning and
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with Schnorr, we can do more blinding scenarios where blacklisting wouldn't even be possible. And that's our approach.
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Yeah. We could have made it blinded from day 1, but there are a lot of UI challenges. Yeah. But, you know, with certain events that happened this year, we're kind of accelerating that as you can imagine.
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How about other risk with state chains? Do users have,
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you know, to worry about these state chain orchestrator,
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Indeed.
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So if the state chain entity was to cooperate with a previous owner, in theory, they could steal the funds.
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We've built a load of things to not let that happen. We have a we use an HSM on the back end to delete the free,
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the the private keys, the key shares. But also I think the the biggest
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reason we wouldn't do that is because every time a state coin is created, you have essentially a backup transaction.
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If the state chain entity was to cooperate with a previous owner, you would have evidence that that that would that would have happened. We call it proof of scam. So you can always prove that the,
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you know, that the state chain had misbehaved. And I think that's probably the biggest, weapon we have to say that we're gonna cooperate because you can, you know, cryptographically prove we, you know, stole the funds.
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That's great. And you know who I am. I'm here. Yeah. Yeah. Wouldn't be good.
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at least within the context of, you know, state chains.
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Anyone wanna make any comments about what we've seen with some of the other CoinJoin coordinators,
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as of late. I know that's been a point of contention, and, you know, I figured we get some spicy discussion in. Ben, you look you look like you have something to say. Yeah. I I used to work at Wassabi, so it's really sad to see, like, that they, they did do that because,
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But for 2, they're not they're, like, they're not even taking that stance or thinking, like, we're gonna use, like they're talking about, like, using Elliptic
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to, like, coin to, like, do chain analysis in every coin that comes in. And, like, that's just awful. Like, so
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that's, like, sad to see and, like, really it kind of shows the, like, benefits of things like joint market where it's like there is this no coordinator.
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No one can stop it. No censorship there. So, like, you know, the corn the having the centralized coordinator is nice because, you know, it creates this
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nice incentives where they can, you know, make money and develop the wallet and do all this stuff, but, you know, also has this obviously, centralization is not the best and we can, you know, censorship comes in. So,
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it's sad to see but
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I think,
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you know, luckily in the in the space, there are other alternatives. It's not the only option
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of going to another coordinator
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system entirely like Samurai Whirlpool
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or, you know, getting rid of a coordinator entirely and going to, you know, make or take your protocol sort of, like, join market.
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But, you know, other people can run their own wasabi instances and, you can just choose not to mix with the main,
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company.
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So, yeah, it's not it's not the end of the world. Right? We're
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having this, you know, diverse market of, you know, these privacy providers of sorts come in to provide these services.
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But it is a little, upsetting when people, like, preemptively
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decide to do these things without, you know,
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It's a lie.
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It's a lie?
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So, like, don't look at it like you're preempting back to the point.
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There's a legal side to the story.
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Now we there's field out information
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that legally protect me to work.
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That protects us. We you know, we're in a
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would love to give Wasabi
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a voice. Would have loved to have,
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someone from Wasabi on stage, but,
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unfortunately,
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we couldn't make that happen. So,
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we could move forward unless anyone else has any other comments on that.
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the reality is, as far as we know, there are no rules or regulations
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that
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state that one needs to blacklist
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UTXO's
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coming into a centralized
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coin join service. That's
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as far as we know, and that's coming from zk Snacks, the makers of Wasabi themselves. Right? That's what they have said to us. So they're not aware of anything. It's from what they've they've said. We're not aware of it anything.
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Certainly, I'm not.
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So and and just, you know, the the the the difficulty of trying to actually create that regular if you think about what a coordinator does, it takes a number of different inputs and it just organizes them. Right?
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So to try and legally block that kind of activity
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is going to be difficult because how do you avoid that
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blocking a lot of other critical services in this world. Right? You know, I mean, what we're talking about is not something dramatic. There's no custody of funds. You know, there's a lot of things that are not going on on there. We're really just talking about
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taking a few bits of data
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and reorganize us us in them, and that kind of happens on the Internet for a number of different services, often with financial amounts involved. So,
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you know, I don't know. I I think that
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it's it's really not good for the Bitcoin world when we start seeing services trying to
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approach things
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in a way that,
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you know, really highlights the the the fact that we have this non fungible.
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It's a it is a fact that it exists, but we shouldn't be trying, particularly as a privacy service,
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to push that forward. Right? The more that that happens, the worse things get for everyone, And, it's
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really sad to see.
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Moving forward,
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coin joins,
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coin swaps,
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can do do you guys see them as being complimentary,
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supplementary?
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Can they be used in tandem? And if so,
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how would you guys propose they'd be used?
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So if you don't wanna dox, like, your coin's history to this person you're coin swapping with,
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then you would wanna coin join beforehand to see, like, okay. You don't know I bought this Bitcoin on Cash App or something.
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So, then they would, like, know you'd hide it there as well as, like, have a larger anonymity set going in to protect you because,
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it's a it's like
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a economic or, like, a, you know, a state act would have high incentives to come in and just do coin swaps all day to try to see who's coin swapping. If you come in with
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a CoinJoin,
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output, they would not be able to totally tell. Like, because if you just came from an address you withdraw with from, like, Coinbase, they'd be like, oh, this is, Ben Carman's coin, and then, you know, the coin's office is useless now. So if you came in with a coin join, they'd have much harder time figuring out who it is. So I really do think, like, both of them together just complement each other extremely well.
284
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285
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we're really just scratching the surface, and I'm sure people are, you know, doing their own mixes of stuff. But moving forward, it'd be really cool to see some services,
286
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sort of combine the 2, take the best properties of each
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and be able to pass it on to the user.
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Nick, you had some ideas about other tools that could be used in conjunction, at least with your project and and coin swaps.
289
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290
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essentially work a lot more with lightning.
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So
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rather than to take a fee
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on our state chain, which, you know, certain companies could see the fee and basically
294
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figure out that our coins had participated in the coins, what we would take a lightning fee up front, issue a kind of like a cholmang token,
295
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and that would be redeemed for, like, a stake coin, and then that would make it slightly more blinded. And and we've looked at coin joins as well as a kind of on the withdraw process. But I think as always, you know, do you want So from the withdrawal process, you mean like, so going
296
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pegging out of the Stakecoin? Like Yes. Yeah. Okay. Interesting. But, we put that on on the draw because we're more focused on lightning. But, and people understand
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there's a lot of things you can do, but the UI challenges
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are kind of harder than the technology behind it. Yeah. We I think all technology here uses Tor. That's an unreliable,
299
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300
00:21:57.040 --> 00:22:05.300
301
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302
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challenges putting together an app to make everything,
303
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work smoothly at the end of the day for the user. You guys think that more progress can be made at the protocol levels with these sort of things, like coin joints, coin swaps, other similar tools, or you think we need more focus on,
304
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the UI, UX, the applications that we're giving the users? Like, where is the bigger room for improvement would you say?
305
00:22:34.429 --> 00:22:35.149
306
00:22:36.365 --> 00:22:39.905
we could really do with cross input signature aggregation.
307
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It would be
308
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a major improvement and not just to the privacy layer of Bitcoin, but to the scalability
309
00:22:47.410 --> 00:22:52.870
as well. Right? Indeed. We have less data going into every transaction. So for me, that is
310
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a very fundamental
311
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improvement. And
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I worry that I don't see it being talked about a lot. I think it's been very briefly mentioned here on the stage
313
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maybe once in the last 2 days,
314
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and I'm really hoping to see more, being done. I know that it's not a simple thing. I'm I'm very aware of this. It's very complicated.
315
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316
00:23:20.620 --> 00:23:26.880
you know, if it was easy to do, it would have been done by now. But, Craig, you wanna give us, like, a little overview of cross input signature
317
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aggregation, what it means as,
318
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like, an overview?
319
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320
00:23:32.554 --> 00:23:35.995
basically, right now, every, Bitcoin input that you,
321
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spend, you have to provide a signature which shows that you own it.
322
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And so we right now construct a transaction,
323
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and for every input, we have to provide this. Now that only not only bloats the size of the transaction
324
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action, but with with Snore, what we can do is actually aggregate them down to 1. And that enables us to not only decrease the size of the transaction, which is good from a scalability
325
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point of view, but in fact, it can make privacy focused transactions like coin joint transactions
326
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actually cheaper to make.
327
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Right? So that's a very important fact. Generally, what we've seen in the history of Bitcoin is that advances happen
328
00:24:16.980 --> 00:24:17.480
when
329
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the cost to the user becomes less. Right? Ultimately,
330
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everything is driven by money. This is a monetary
331
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net network we're on. And if we're looking for things to actually get adoption, one of the reasons
332
00:24:30.150 --> 00:24:34.250
Sigrid has adopt opt adoption in this world is because it was cheaper to do.
333
00:24:34.684 --> 00:24:43.184
So for me, that's a really important thing. It not only will enable Bitcoin to scale better, but it will actually make people turn to privacy focused
334
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transactions
335
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sooner than they might otherwise. Yeah. Absolutely. Yeah. Bitcoin,
336
00:24:49.050 --> 00:24:52.645
337
00:24:53.265 --> 00:24:54.085
are imperative.
338
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And CSAA, or cross input signature aggregation, not only
339
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makes it possible for us to, like, turn every
340
00:25:03.510 --> 00:25:06.410
transaction into a coin join, but it's, like,
341
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you know, incentivizes that economically, which is the amazing thing. So,
342
00:25:11.575 --> 00:25:16.330
you'd actually be paying more to not get in on a coin coin join and,
343
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improve the privacy of yourself and others. So,
344
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yeah, that would be quite a advancement, and, you know, I I hope,
345
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you know, it just doesn't go to the wayside and we could find a way to bring it to Bitcoin. That would be incredible.
346
00:25:33.100 --> 00:25:36.320
Fontaine, haven't heard from you too much. You wanna talk a little bit about,
347
00:25:37.419 --> 00:25:39.685
fully noted why why you picked
348
00:25:40.565 --> 00:25:45.385
join market to put in as opposed to perhaps one of these other centralized coordinator?
349
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350
00:25:48.500 --> 00:25:51.320
you run your own self hosted server, Bitcoin Core,
351
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and
352
00:25:53.940 --> 00:26:02.034
join market is exactly it works the same way as fully noted. It's just built right on top of Bitcoin Core. So it was a kind of a perfect match architecturally
353
00:26:02.414 --> 00:26:04.274
for the app and just kind of
354
00:26:04.799 --> 00:26:07.140
the mental model of how the app works.
355
00:26:09.200 --> 00:26:12.740
I'm, yeah, I'm very excited about adding join market. It is
356
00:26:13.195 --> 00:26:20.255
it's it's very it's mind blowing how it works and kind of the just the cryptography that goes into it to
357
00:26:20.940 --> 00:26:31.665
prevent civil attacks, I think. You know? It's I think it's the reason I like joint market is because I've just my own intuition tells me it's harder to civil attack joint market than a centralized coordinator,
358
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especially the ones where it's cheaper to keep, you know, remixing your coins,
359
00:26:36.924 --> 00:26:37.505
I think.
360
00:26:39.210 --> 00:26:42.510
So and and, obviously, with what has happened recently
361
00:26:42.810 --> 00:26:49.635
has shown light that, you know, central centralized servers where you're doing privacy related stuff probably is gonna be a target.
362
00:26:50.415 --> 00:26:54.355
363
00:26:55.510 --> 00:27:11.535
364
00:27:11.860 --> 00:27:27.134
365
00:27:27.960 --> 00:27:40.274
So I am ecstatic to see all this progress being made in terms of the UI for it. And and it's funny because, you know, you don't don't have the centralized coordinator making fees and facilitating the development of its software. So,
366
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you don't have, like, a team that's been incentivized to, like, you know, put out a really nice UI like Wasabi or Samurai has.
367
00:27:47.060 --> 00:27:50.520
So it's really been sort of, you know, up to the community to, you know,
368
00:27:50.980 --> 00:27:59.474
get together and and put stuff together, hook into the API, and and make something presentable for users. So it's been really awesome to see people like yourself putting out,
369
00:27:59.914 --> 00:28:01.135
you know, this UI.
370
00:28:01.674 --> 00:28:03.695
We've seen some efforts from
371
00:28:05.000 --> 00:28:12.780
from others like the Bitcoin design community, and I know Gigi has been deeply involved in in the the web UI.
372
00:28:13.175 --> 00:28:16.955
That's that's an outfit. I believe it's on Umbrel now. It it's called Flow. What is it called?
373
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374
00:28:24.309 --> 00:28:29.929
375
00:28:30.575 --> 00:28:31.075
And,
376
00:28:31.695 --> 00:28:36.595
yeah, let's let's see more. I I I know there's some people working on some other mobile
377
00:28:37.135 --> 00:28:41.160
apps. Like, it would be great if, we could get those Android users on.
378
00:28:41.460 --> 00:28:42.580
Mhmm. So,
379
00:28:44.020 --> 00:28:45.480
yeah, that has been an awesome
380
00:28:46.085 --> 00:28:48.025
awesome, development to see.
381
00:28:50.565 --> 00:28:52.424
So, yeah, more join market stuff.
382
00:28:54.510 --> 00:29:02.530
Ben, you wanna get into some stuff with, coin joins and lightning? Let's dive a little into some LN Vortex stuff. Sure. Yeah. Like,
383
00:29:03.684 --> 00:29:06.664
384
00:29:06.965 --> 00:29:20.120
when you have a lightning channel, you just to tell people about the channel to prove you're not lying about it, you just say, like, this is my UTX, so my channel is in. So everyone can see, like, you know, this node owns this channel, and then you just look at the opening
385
00:29:20.605 --> 00:29:33.040
inputs in there and be like, oh, okay. This is his wallet. And, he docks a lot of your on chain privacy here. So what most or if you're privacy minded, what you should be doing is, like, coin joining through, like, something like Wasabi or Whirlpool or join market
386
00:29:33.500 --> 00:29:36.320
or doing a coin swap with, like, Mercury Wallet or something.
387
00:29:36.705 --> 00:29:41.445
And then so you have these new coins, and then you open the channel. So when people see that you have,
388
00:29:41.905 --> 00:29:47.080
c t x o, they don't know your actual hoistory. They can't see, like, oh, you got these coins from Coinbase or something.
389
00:29:47.540 --> 00:29:56.025
So, but that still is not the best because, you know, you you're not having to do, like, 2 or 3 transactions all on chain and that takes up a lot of space. So,
390
00:29:56.825 --> 00:30:18.205
I tried to solve this by building vortex, which is basically a way to instead of doing a coin join then opening a channel, you you just open a channel in a coin join with, like, multiple other people. So it is just, you know, you're for 1, saving on chain space, and then 2, like, you know, your lightning node is gonna be online, like, 247, at least it should be. So why not just have this thing coin joining all the time as well,
391
00:30:27.894 --> 00:30:31.434
very small on chain savings by opening a channel with multiple people.
392
00:30:31.975 --> 00:30:36.475
393
00:30:37.180 --> 00:30:38.800
wallet that you have mixed and,
394
00:30:39.500 --> 00:30:44.720
using that to open up channels. It's like you're doing the coin joint right into the channel open.
395
00:30:45.245 --> 00:31:16.350
396
00:31:18.135 --> 00:31:22.075
It might be illegal. I don't know. So maybe someone on will run it, but yeah.
397
00:31:26.570 --> 00:31:35.150
398
00:31:35.610 --> 00:31:40.424
You know, Johnny will push the pressure on you. So, let's try to steer clear of that. Yeah. Yeah.
399
00:31:40.725 --> 00:31:48.220
400
00:31:49.100 --> 00:31:54.240
this isn't for privacy. It's for cheaper on chain. I'm a businessman. I'm trying to save money. So,
401
00:31:55.304 --> 00:31:56.765
there's actually, like
402
00:31:57.385 --> 00:31:59.565
people seem okay with that now. So yeah.
403
00:32:00.345 --> 00:32:01.164
404
00:32:02.030 --> 00:32:07.170
where would you say the state of the project is right now? It seems very early. Right? But,
405
00:32:08.350 --> 00:32:14.565
406
00:32:15.424 --> 00:32:19.664
I'm I've been working like, I'm too busy right now with my, like, real job. But
407
00:32:20.880 --> 00:32:25.140
Yeah. Startup life is hard. Yeah. Startup life sucks, but it's also great. But,
408
00:32:25.440 --> 00:32:35.075
I actually talked to, like, a bunch of people here, this week about it, and, I got people few people to commit to actually, like, paying money to try to build a UI for it. So
409
00:32:35.375 --> 00:32:39.890
once I have that out, it'll be very easy to launch. So I I should be launching in the next month or 2.
410
00:32:40.430 --> 00:32:45.730
411
00:32:46.975 --> 00:32:48.755
Yeah. I've been thinking a lot about,
412
00:32:49.215 --> 00:32:50.595
Coin Joins and relationship
413
00:32:51.054 --> 00:32:53.475
to LN and what we can do to,
414
00:32:55.670 --> 00:33:01.670
you know, give users the the interfaces and and the tools to be able to use them in tandem. So,
415
00:33:02.784 --> 00:33:04.404
yeah, I've I've been working on
416
00:33:05.664 --> 00:33:06.404
some external
417
00:33:06.705 --> 00:33:11.365
account imports from XPUBs to pull into Zeus with the LND PSBT API.
418
00:33:12.030 --> 00:33:14.670
And I very much would like to,
419
00:33:15.070 --> 00:33:17.810
you know, get some coordination with some of the coin joint
420
00:33:18.190 --> 00:33:18.690
projects
421
00:33:19.685 --> 00:33:22.665
to provide the ability to do some, you know, external
422
00:33:23.365 --> 00:33:24.985
signing for, like, you know,
423
00:33:25.525 --> 00:33:26.505
you know, unfunded,
424
00:33:27.220 --> 00:33:29.480
unsigned PSBT that Zeus passes it
425
00:33:29.940 --> 00:33:34.440
and going back. So that would save you from having to, like, transfer make a transaction
426
00:33:35.300 --> 00:33:35.800
to,
427
00:33:36.495 --> 00:33:39.315
you know, from your samurai or whirlpool to Zeus.
428
00:33:41.135 --> 00:33:43.475
But, you know, your solution cuts out that
429
00:33:43.850 --> 00:33:49.389
extra step. Like, just go from the coin join right into the Lightning channel, and I find that fascinating.
430
00:33:50.090 --> 00:33:52.750
431
00:33:53.289 --> 00:33:55.665
if they wanna open a Lightning, you know, a lot of their, like,
432
00:33:56.045 --> 00:34:00.945
their process is, like, either, like, send from, like, you know, their exchange or their hardware wallet
433
00:34:01.440 --> 00:34:02.820
to, like, you know, Samurai,
434
00:34:03.360 --> 00:34:18.685
mix it, do, like, you know, 2 or 3 on chain transactions, then send it to the LND wallet, then open the channel. So it's like you're wasting all this block space and spending all these fees, and it really sucks. So At least you're propping up the fee market. That's good. Yeah. So, you just do it all in one
435
00:34:19.840 --> 00:34:21.140
nice channel. Yeah.
436
00:34:24.880 --> 00:34:25.380
437
00:34:26.480 --> 00:34:26.980
So
438
00:34:29.095 --> 00:34:30.555
let's take it back to,
439
00:34:33.015 --> 00:34:35.740
you know, protocol stuff versus application stuff.
440
00:34:36.780 --> 00:34:38.880
Do you guys see any other
441
00:34:39.740 --> 00:34:47.075
things substantially that application develop I mean, we we got into CISA earlier, you know, and we've said that there are a lot of,
442
00:34:47.475 --> 00:34:50.455
enhancements that we can make on protocol layers. But
443
00:34:50.755 --> 00:34:55.700
what more can application developers do to make these tools more accessible?
444
00:34:59.280 --> 00:35:09.965
445
00:35:10.420 --> 00:35:16.040
and other stuff that, you know, you won't block as an on chain. We could do that for, like, proofs inside your coin joint. So,
446
00:35:16.660 --> 00:35:18.760
there's probably now room for a lot more,
447
00:35:19.715 --> 00:35:22.935
different models and, like, 0 link or something to actually create CoinJoints.
448
00:35:24.275 --> 00:35:27.095
I know, like, some people are working on research on that, but,
449
00:35:27.910 --> 00:35:29.690
it would be cool to see someone, like, you
450
00:35:29.990 --> 00:35:42.244
know, now they have Taproom and all these other new properties, let's, like, try to build out things that, like, actually use it and, because that was, like, largely a privacy upgrade and with it, we should be able to, like, create new kind of coin joint protocols
451
00:35:42.865 --> 00:35:45.605
or, at least improve them currently. And,
452
00:35:46.000 --> 00:35:52.960
we haven't really seen that yet because it's only been a couple months, but Yeah. I would love to see that happen. Yeah. We're just starting to kick off,
453
00:35:53.944 --> 00:35:56.365
454
00:35:56.905 --> 00:35:57.484
You know,
455
00:35:57.944 --> 00:36:07.750
Lightning Labs and and Taro was a pretty big announcement, and it's gonna have a lot of repercussions. But, yeah, I would love to see, you know, more tooling, through, like, Tapscrubs
456
00:36:08.450 --> 00:36:10.470
and really getting creative with that to
457
00:36:10.825 --> 00:36:13.725
bring people better privacy. So that would be exciting.
458
00:36:14.265 --> 00:36:18.445
459
00:36:18.770 --> 00:36:27.750
you know, unless we do away with, which, frankly, without a hard fork, I don't see it happening, this kind of issue of Bitcoin being basically non
460
00:36:28.275 --> 00:36:28.775
fungible
461
00:36:29.315 --> 00:36:32.535
at product layer. Right? If you can see the amounts,
462
00:36:33.155 --> 00:36:36.695
unfortunately, there is a coin history, and you can trace it back over time.
463
00:36:36.995 --> 00:36:37.495
So
464
00:36:37.809 --> 00:36:46.390
unless we can do away with that, we're gonna have to deal with the fact that we have to build something on the application layer. And then, really, you're talking about,
465
00:36:46.714 --> 00:36:48.175
you know, the idea of anonymity
466
00:36:48.954 --> 00:36:51.055
sets. Right? So you you're sort of
467
00:36:51.355 --> 00:36:56.540
one of a number of people, and, obviously, the greater that group of people, the more anonymous you are.
468
00:36:58.300 --> 00:37:08.115
So it's one thing to talk about, you know, how can we have new tools, but we also have existing tools today. And every time you launch a new tool, you're gonna have to possibly
469
00:37:08.575 --> 00:37:10.835
start from 0 on that anonymity
470
00:37:11.454 --> 00:37:14.980
set. Right? So that crowd is gonna start off with 1. It's gonna go to
471
00:37:15.360 --> 00:37:29.095
234, and it takes time. It, you know, it takes time for that tool to get out there. It takes time for people to trust trust the the tool for clients to be written at how many wallets are going to adopt the same tool or what is everyone going to have to use one wallet?
472
00:37:29.500 --> 00:37:30.320
So, you know,
473
00:37:30.780 --> 00:37:32.080
I think it's dangerous
474
00:37:32.460 --> 00:37:36.355
to constantly be looking into the future and saying, well, what could happen? Right?
475
00:37:36.915 --> 00:37:39.734
Because we might end up in a place where
476
00:37:40.435 --> 00:37:42.935
if we don't push the tools that we have today,
477
00:37:43.395 --> 00:37:47.500
then by the time we get to the tools that we think might be better,
478
00:37:47.880 --> 00:37:54.620
the world has changed to the point that those tools are seen as not good. Right? But if we use the tools that we have today,
479
00:37:54.924 --> 00:38:01.184
it changes the mindset of people, and it changes how society views it. So if CoinJoin becomes,
480
00:38:01.565 --> 00:38:04.065
you know, a widely used thing today,
481
00:38:04.400 --> 00:38:20.674
then that will change the way that society views it. And I think it's important not to wait too long to actually use the tools because as I was saying, the crowd grows. And as the the crowd grows, which not only helps the anonymity of your coins, but it also changes the way that the rules and regulations
482
00:38:21.214 --> 00:38:22.515
of the world will form.
483
00:38:22.920 --> 00:38:25.579
So, you know, I think there's a different way to see it.
484
00:38:26.040 --> 00:38:34.465
485
00:38:35.005 --> 00:38:46.830
confidential transactions, which is, like, perfect for coin joints where you could have unequal amounts and, like, do all these spends, you know, it is, you know, slightly different trade offs with it being the, side chain and kinda custodial.
486
00:38:47.290 --> 00:38:47.450
But,
487
00:38:48.155 --> 00:38:59.440
it would be perfect as a privacy tool and, like, no one is using that as as build something, which is like, that would be, like, amazing. I would use that all the time if someone built where you could coin join on there and do all these unequal amount, things,
488
00:38:59.819 --> 00:39:00.559
and then,
489
00:39:01.180 --> 00:39:08.645
atomic swap back into real Bitcoin. Like, and, you know, no one's built that in, like, 4 or 5 years, and, like, we really aren't using our tools yet. And,
490
00:39:09.205 --> 00:39:15.950
491
00:39:16.250 --> 00:39:18.269
especially self sovereign wallets.
492
00:39:18.895 --> 00:39:19.555
You know?
493
00:39:20.975 --> 00:39:21.795
So yeah.
494
00:39:22.255 --> 00:39:24.195
495
00:39:24.655 --> 00:39:25.955
you know, helping facilitate
496
00:39:26.415 --> 00:39:28.035
the building of these things, but,
497
00:39:28.600 --> 00:39:34.940
you know, we got some good actors that we're extremely grateful for. Like, HRF. HRF both through us
498
00:39:35.724 --> 00:39:37.984
a Bitcoin each at about the same time.
499
00:39:38.365 --> 00:39:38.865
And,
500
00:39:39.405 --> 00:39:45.010
yeah, it's really awesome that we've been able to use those sets wisely and continue to build out our prod
501
00:39:45.490 --> 00:39:51.750
products. So, you know, shouts to HRF and Alex Gladstein, all the good folks over there for for supporting us.
502
00:39:52.370 --> 00:39:55.275
So that's great. But, yeah, we hit on a lot of great points right there.
503
00:39:56.694 --> 00:39:59.115
I think it's very important to hit on, you know,
504
00:40:00.190 --> 00:40:01.810
perfect being the enemy of good
505
00:40:02.110 --> 00:40:04.050
and, you know, people holding out to,
506
00:40:04.990 --> 00:40:07.250
you know, for privacy tools that may
507
00:40:07.654 --> 00:40:09.994
you know, better properties or whatever or whatnot.
508
00:40:11.414 --> 00:40:16.875
But you know, that that's like speaking from a position of privilege. There are a lot of people that need
509
00:40:17.300 --> 00:40:18.200
Bitcoin privacy
510
00:40:18.500 --> 00:40:19.000
today.
511
00:40:19.780 --> 00:40:22.120
And, you know, how do we support those people?
512
00:40:23.620 --> 00:40:24.360
I think
513
00:40:24.980 --> 00:40:26.200
by and large, like,
514
00:40:26.685 --> 00:40:33.265
the best way is to get in on these mixes with people, use the tools, and help increase those anon sets.
515
00:40:33.805 --> 00:40:34.305
And,
516
00:40:35.920 --> 00:40:40.020
you know, we saw it even with the the construction of this panel,
517
00:40:40.560 --> 00:40:41.060
that,
518
00:40:41.440 --> 00:40:42.500
you know, CoinJoin,
519
00:40:42.800 --> 00:40:43.300
CoinSwaps,
520
00:40:44.075 --> 00:40:46.175
privacy in general on Bitcoin
521
00:40:46.795 --> 00:40:48.015
has a bit of a stigma.
522
00:40:49.275 --> 00:40:49.775
People,
523
00:40:51.035 --> 00:40:55.270
or some companies in the space don't want to touch it with a 10 foot pole,
524
00:40:55.570 --> 00:40:57.190
and and that's really unfortunate.
525
00:40:58.369 --> 00:40:59.910
But what can we do
526
00:41:00.290 --> 00:41:01.430
to try to destigmatize
527
00:41:03.535 --> 00:41:04.915
Bitcoin privacy, which
528
00:41:05.375 --> 00:41:06.835
is is a human right?
529
00:41:08.095 --> 00:41:14.210
530
00:41:14.829 --> 00:41:18.450
not only use the tools, but encourage others to use them, explain them.
531
00:41:18.750 --> 00:41:19.245
And,
532
00:41:19.725 --> 00:41:30.210
you know, I I have, like, a a thing I like to say, like, normalized CoinJoin, you know, or coin CoinSoft. They're not normal normalize these things because they they they they really like
533
00:41:30.990 --> 00:41:34.850
privacy. If you believe it's a basic human right, then Indeed. You know,
534
00:41:35.230 --> 00:41:36.930
why should we feel ashamed
535
00:41:37.475 --> 00:41:42.215
to just aim aim for that? Because that's all that a CoinJoin is doing. It's just giving you financial
536
00:41:42.515 --> 00:41:43.015
privacy
537
00:41:43.555 --> 00:41:44.455
over your coins.
538
00:41:45.075 --> 00:41:47.720
So, you know, the the sort of
539
00:41:48.340 --> 00:41:52.520
worries and we sort of laugh at each other and smile and say, well, maybe it's illegal.
540
00:41:53.220 --> 00:41:57.795
But actually, we need to take the the kind of, in my view, the firm view that it's not. Right?
541
00:41:58.575 --> 00:42:00.835
I think that we shouldn't kind of,
542
00:42:02.015 --> 00:42:05.530
have this kind of half view. We should actually be brave and say, you know what?
543
00:42:06.230 --> 00:42:08.970
What we're asking for here is not something which is,
544
00:42:09.830 --> 00:42:11.290
you know, in some way
545
00:42:11.685 --> 00:42:12.905
strange or,
546
00:42:13.765 --> 00:42:15.145
you know, not kosher.
547
00:42:15.525 --> 00:42:18.825
It's really just a normal thing that we should all want.
548
00:42:26.109 --> 00:42:28.425
549
00:42:28.805 --> 00:42:34.185
this misconception based on, you know, I guess, Bitcoin's history, darknet markets that,
550
00:42:34.700 --> 00:42:40.080
you know, why would you want privacy? Are you trying to buy drugs? Are you trying to support terrorism?
551
00:42:41.020 --> 00:42:41.520
And
552
00:42:41.820 --> 00:42:42.460
it's it's
553
00:42:43.505 --> 00:42:46.405
that that couldn't be, you know, further from the truth. It's like
554
00:42:46.705 --> 00:42:48.645
when you make a purchase, right,
555
00:42:49.105 --> 00:42:54.220
like, do you want the person that you pay to know how much money you have and to follow you
556
00:42:54.520 --> 00:42:55.820
to every other store
557
00:42:56.360 --> 00:42:57.900
that you go to? No.
558
00:42:58.440 --> 00:42:59.500
No. That sucks.
559
00:43:00.665 --> 00:43:03.085
That's garbage. Do you want your employer
560
00:43:03.865 --> 00:43:04.525
to know
561
00:43:05.145 --> 00:43:06.765
what you do with your money
562
00:43:08.740 --> 00:43:11.960
after every paycheck. No. Never. Hell no.
563
00:43:13.380 --> 00:43:15.480
564
00:43:16.505 --> 00:43:19.885
565
00:43:20.744 --> 00:43:23.724
as getting, you know, medicine for you or your family
566
00:43:24.105 --> 00:43:26.750
or, you know, making other sensitive transactions
567
00:43:27.050 --> 00:43:30.750
that, you know, other people shouldn't, you know,
568
00:43:31.850 --> 00:43:32.590
know, like,
569
00:43:32.970 --> 00:43:34.270
these tools are imperative,
570
00:43:35.905 --> 00:43:37.845
you know, especially in a world
571
00:43:38.305 --> 00:43:42.005
where, you know, there's this increasing push by the state to
572
00:43:42.730 --> 00:43:48.109
by not just the state, I suppose, but also corporations to know as much information about your life
573
00:43:48.410 --> 00:43:50.190
and your finances. 1st and foremost,
574
00:43:50.945 --> 00:43:54.805
it's important that, you know, we don't just try to we don't just recreate
575
00:43:55.105 --> 00:43:56.485
these tools in this,
576
00:43:56.865 --> 00:43:58.085
you know, open blockchain
577
00:43:58.385 --> 00:44:01.570
system and that we give users the ability,
578
00:44:02.750 --> 00:44:07.810
to take back some of that privacy and only selectively reveal the information that they want to reveal.
579
00:44:08.535 --> 00:44:09.355
580
00:44:10.215 --> 00:44:18.170
581
00:44:18.470 --> 00:44:33.365
But your Bitcoin privacy is extremely important because, like, for 1, it's stored like, the history is there forever. So even if you fuck it up, it's gonna be fucked. Yeah. Yeah. Like, that's there's no getting the toothpaste back in the tube if you make an error with your on chain,
582
00:44:33.765 --> 00:44:34.265
583
00:44:34.565 --> 00:44:35.065
So
584
00:44:37.590 --> 00:44:40.170
you gotta make sure you're doing it right from the get go.
585
00:44:40.630 --> 00:44:44.570
But even then, there's still a lot of challenges, like your anon set deteriorating
586
00:44:44.950 --> 00:44:45.255
over
587
00:44:45.815 --> 00:44:49.994
time. You know, perhaps some people that are in your mixes, they'd begin to
588
00:44:50.375 --> 00:44:54.315
KYC themselves as they're trying to sell Bitcoins perhaps through,
589
00:44:54.770 --> 00:44:58.310
you know, some of these exchanges? Don't do that, guys. Don't do that.
590
00:45:01.330 --> 00:45:03.510
Yeah. It's it's a can of worms, really.
591
00:45:04.165 --> 00:45:07.385
So, you know, what what else can can people do?
592
00:45:07.845 --> 00:45:08.345
593
00:45:08.645 --> 00:45:09.845
too. I think,
594
00:45:10.405 --> 00:45:12.750
OpenNoms is really great. He's just constantly helping people out and
595
00:45:15.150 --> 00:45:16.290
excellent resources.
596
00:45:17.070 --> 00:45:17.730
If you
597
00:45:18.110 --> 00:45:21.410
highly suggest looking at his GitHub and going through all his information.
598
00:45:23.055 --> 00:45:27.615
599
00:45:28.815 --> 00:45:30.515
service that that blocks,
600
00:45:30.960 --> 00:45:40.545
you know, coin joined funds, you know, take them off. You know, don't be afraid to call them out because, effectively, we have 2 forces pulling in the world. Right? We've got the sort of
601
00:45:41.265 --> 00:45:44.005
call them governmental forces that are pulling us towards
602
00:45:44.785 --> 00:45:54.680
the regulation, the KYC side. We need something on the other side, and that has to be us. Right? Who else is it going to be? Who else is gonna stand up? If not us, then who? Exactly.
603
00:46:01.395 --> 00:46:04.455
604
00:46:05.315 --> 00:46:07.560
you know, privacy is a human right, but
605
00:46:08.280 --> 00:46:11.820
rights are not granted. They're taken. And it's gonna take
606
00:46:12.680 --> 00:46:13.900
a lot of,
607
00:46:14.440 --> 00:46:18.205
you know, push from us or or pulling if we're
608
00:46:18.744 --> 00:46:19.965
using the pulling analogy,
609
00:46:21.065 --> 00:46:24.920
to to pull things in the direction we want to see them. So that's gonna take
610
00:46:25.240 --> 00:46:34.265
individuals stepping up. That's gonna take developers and and projects stepping up. That's gonna take companies stepping up and saying, no. This is the right thing for us,
611
00:46:35.605 --> 00:46:37.545
for for our users, our customers,
612
00:46:38.164 --> 00:46:40.345
and and for humanity as a whole.
613
00:46:40.750 --> 00:46:41.250
Because
614
00:46:41.950 --> 00:46:44.690
the alternative that we could, you know,
615
00:46:45.070 --> 00:46:45.810
very rapidly
616
00:46:46.430 --> 00:46:47.810
decline into is,
617
00:46:48.365 --> 00:46:49.005
you know, a,
618
00:46:49.885 --> 00:46:50.385
totalitarian
619
00:46:50.685 --> 00:46:51.985
hellscape of sorts
620
00:46:52.525 --> 00:46:53.025
where
621
00:46:53.805 --> 00:46:56.865
every transaction is recorded and known about
622
00:46:57.430 --> 00:46:57.930
from,
623
00:46:58.390 --> 00:46:59.530
you know, your personal
624
00:46:59.830 --> 00:47:06.235
transactions at the pharmacy or regarding to your health to the pocket change that you give to your son.
625
00:47:07.995 --> 00:47:16.720
Do you really wanna live in a world where you have to get permission from the government or or, you know, tell them about spending money you give to your kids.
626
00:47:17.180 --> 00:47:18.400
I sure as hell don't.
627
00:47:20.495 --> 00:47:24.595
So, yeah, we're coming up on time soon. We've got about 2 minutes to wrap up.
628
00:47:25.295 --> 00:47:27.235
Do you guys have any closing thoughts?
629
00:47:30.109 --> 00:47:31.410
630
00:47:32.589 --> 00:47:34.369
631
00:47:34.829 --> 00:47:36.369
building some awesome tools.
632
00:47:38.005 --> 00:47:44.185
633
00:47:44.485 --> 00:47:56.444
and it's monumentally beneficial for you. So, like, I know a lot of people are daunted. It's like, oh, that's the nerdy Bitcoin people that it's like that's what the hardcore people do. It's like, no. It's, like, I could get my mom to use, like,
634
00:47:56.744 --> 00:48:01.085
any of them. They're they're not that hard. So you should try it out if you haven't done it before.
635
00:48:01.385 --> 00:48:02.204
636
00:48:02.710 --> 00:48:05.289
Get on your Umbrella, downloads, join market,
637
00:48:05.589 --> 00:48:10.069
check out Mercury Wallet. I've been having a great time planning with with it this week, and,
638
00:48:10.905 --> 00:48:13.325
it's just super easy to use. Just deposit,
639
00:48:13.625 --> 00:48:14.445
auto swap.
640
00:48:14.905 --> 00:48:17.645
I'm just running around and increasing my in onset.
641
00:48:18.740 --> 00:48:23.480
642
00:48:24.020 --> 00:48:36.210
some guy decided to create the state chain torch, and we learned so much in those 3 months. You know, it was passing around on Twitter. People were finding bugs all over the place, and that really helped harden the product and get it to where we could be production ready.
643
00:48:36.750 --> 00:48:43.090
644
00:48:44.110 --> 00:48:51.255
yeah. Yeah, I encourage everyone to go out and run your coin joints, try some coin swaps out, and to keep using these tools
645
00:48:51.714 --> 00:48:53.255
to help proliferate them
646
00:48:53.690 --> 00:48:57.630
and, you know, make privacy better for yourself, but also for others.
647
00:48:58.329 --> 00:49:02.670
648
00:49:03.405 --> 00:49:06.785
would would be great. You know, you might think that I I sort of enjoy being,
649
00:49:07.165 --> 00:49:11.905
you know, one of only 2 world multiple clients, but, really, I wish there were 5. I wish there were there were 10.
650
00:49:12.580 --> 00:49:21.800
For me, that that that would be great. It not not only derisks the entire space, but it just makes it much more accessible to everyone because everyone comes in with different tools. Right? So,
651
00:49:22.315 --> 00:49:28.015
if there are any devs in the or do or do the audience here really think think about building this stuff in because
652
00:49:28.395 --> 00:49:43.825
it's not like we have forever to do it. Right? Time is critical. This is a Yeah. Very much an unsolved area of Bitcoin today. And the more people that are working on it, the faster or the more chance we have of getting to a a place where I think we all want to be.
653
00:49:44.605 --> 00:49:50.450
654
00:49:51.230 --> 00:49:55.250
you know, consider implementing one of these tools into your wallet.
655
00:49:56.515 --> 00:50:01.575
And, Yeah. On that note, let's call it. Thank you all for joining me today. You've been a great discussion.
656
00:50:10.150 --> 00:50:13.450
657
00:50:14.265 --> 00:50:17.244
Bitcoin developer funding panel, open source funding.
658
00:50:18.825 --> 00:50:24.320
My name is Mike Schmidt. We have a great panel here. My esteemed colleagues, we have Adi Shankara
659
00:50:25.180 --> 00:50:28.240
from Summer of Bitcoin, Ben Price from OpenSats,
660
00:50:28.540 --> 00:50:29.040
and
661
00:50:29.420 --> 00:50:32.720
The Bitcoin Company, and Connor Okus from Spiral.
662
00:50:33.825 --> 00:50:38.005
Before we get started, I I don't know if Matt is out there, but I just wanted to
663
00:50:38.464 --> 00:50:42.560
get a round of applause for Matt Odell in putting this together, this open source
664
00:50:45.520 --> 00:50:45.840
stage.
665
00:50:46.640 --> 00:50:47.780
So some quick introductions.
666
00:50:48.640 --> 00:50:52.565
Mike Schmidt, I head up Brink. We are a 501c3
667
00:50:52.945 --> 00:50:56.085
not for profit organization who's focused on funding
668
00:50:56.385 --> 00:50:59.685
developers that are working on bitcoin protocol, bitcoin core,
669
00:51:00.180 --> 00:51:01.640
and, Lightning Technology.
670
00:51:02.420 --> 00:51:07.480
We are currently funding 12 developers that are working on that technology right now.
671
00:51:07.860 --> 00:51:08.360
And
672
00:51:08.660 --> 00:51:09.160
they're
673
00:51:09.875 --> 00:51:14.615
in the form of grants as well as, our mentorship program for young younger developers.
674
00:51:15.235 --> 00:51:20.780
And we have an office in London where some of them are congregating and trying to build that out as a bit of a hub.
675
00:51:21.320 --> 00:51:24.860
And we also publish the, Bitcoin OPTECH newsletter,
676
00:51:25.160 --> 00:51:27.820
and you should subscribe if you haven't already.
677
00:51:28.965 --> 00:51:33.385
678
00:51:34.085 --> 00:51:39.440
Spiral is an an initiative within Block, formerly Square, and we're focused on,
679
00:51:40.060 --> 00:51:44.480
improving the open source Bitcoin ecosystem through a number of different initiatives.
680
00:51:45.125 --> 00:51:48.665
One of those initiatives is our grant program where we fund over,
681
00:51:49.365 --> 00:51:54.900
at this point, 2 2 dozen or so developers and designers and some project managers as well,
682
00:51:55.359 --> 00:51:56.180
all working on
683
00:51:56.560 --> 00:52:06.535
various types of Bitcoin projects from, like, Bitcoin Core itself to lightning infrastructure projects to SDKs that make building on top of Bitcoin a lot easier.
684
00:52:07.154 --> 00:52:07.555
And,
685
00:52:08.540 --> 00:52:18.160
we have a global footprint as well, so our grantees are from all over the world, from from India to Australia to to Southeast Asia, America,
686
00:52:18.605 --> 00:52:25.505
Europe, and more. And we want to kinda continue that trend and support developers from other parts of the world as well.
687
00:52:27.119 --> 00:52:27.619
And
688
00:52:28.080 --> 00:52:32.339
just a just a quick shout out to some other organizations who also fund
689
00:52:32.640 --> 00:52:34.180
open source Bitcoin development,
690
00:52:34.480 --> 00:52:41.785
the likes of of, like, Micah at Brink, and, what Ben is doing at Open Sats, and some other organizations like Gemini, Kraken,
691
00:52:42.325 --> 00:52:42.825
Coinbase,
692
00:52:43.500 --> 00:52:47.020
bit bitmex, all all support an an open source,
693
00:52:47.420 --> 00:52:52.059
funding, and it really is a a community effort. And it's really good to see,
694
00:52:52.825 --> 00:53:02.640
you know, funding for for for development moving in in a positive direction, really. So, like, I'm really I'm really happy personally to to to continue to see that.
695
00:53:04.319 --> 00:53:04.819
696
00:53:05.760 --> 00:53:06.420
697
00:53:06.720 --> 00:53:08.900
My name's Ben Price. I
698
00:53:09.680 --> 00:53:11.539
actually have a for profit,
699
00:53:12.055 --> 00:53:13.515
and we started a nonprofit.
700
00:53:15.015 --> 00:53:21.595
The for profit's called the Bitcoin company. It's kind of starting as rewards and loyalty company and moving towards kind of a full stack bank.
701
00:53:22.280 --> 00:53:30.780
That's the way we think that we can kind of bring Bitcoin to the most people or consumers in the world. And then what we're here to talk about or what I'm here to talk about today is OpenSats,
702
00:53:31.535 --> 00:53:33.395
which recently launched, which is really exciting.
703
00:53:34.175 --> 00:53:35.155
That is a 501c3
704
00:53:36.335 --> 00:53:37.235
not for profit,
705
00:53:38.015 --> 00:53:42.329
with a mission of supporting contributors to free and open source software,
706
00:53:42.630 --> 00:53:44.010
specifically around Bitcoin.
707
00:53:45.190 --> 00:53:49.675
It's a the board is full of a bunch of Bitcoiners. We're definitely staying focused there. But technically
708
00:53:50.135 --> 00:53:53.675
speaking, it's all free and open source software. Anything that helps Bitcoin flourish,
709
00:53:54.215 --> 00:53:57.035
needs a lot of, I guess there's a lot of, like, technical,
710
00:53:57.890 --> 00:53:58.790
technical dependencies,
711
00:53:59.650 --> 00:54:04.950
that that can help Bitcoin succeed. So we're we're looking forward to funding all of those. And,
712
00:54:05.515 --> 00:54:13.295
you know, shout out to the I think I think the developers get a lot of love here, but there's a lot of, ways to to contribute back to open source, including
713
00:54:13.810 --> 00:54:15.670
design, code review, research,
714
00:54:16.850 --> 00:54:18.150
just general education.
715
00:54:18.610 --> 00:54:23.894
So we're really, looking forward to supporting kind of anyone contributing back, not just developers.
716
00:54:24.914 --> 00:54:25.414
717
00:54:26.115 --> 00:54:32.750
718
00:54:33.450 --> 00:54:33.950
designers,
719
00:54:34.330 --> 00:54:35.550
and sponsor organizations,
720
00:54:35.850 --> 00:54:41.605
we are helping university students learn about Bitcoin and contribute to open source Bitcoin projects.
721
00:54:42.305 --> 00:54:49.750
One of our flagship programs is where a university student contributes to an open source Bitcoin project under the guidance of a mentor,
722
00:54:50.130 --> 00:54:52.230
and, is paid a stipend in BTC.
723
00:54:52.690 --> 00:54:56.470
A number of our graduates have gone on to contribute to Bitcoin core
724
00:54:56.815 --> 00:55:00.355
or joint organizations like Chaincode Labs, Galloway,
725
00:55:00.734 --> 00:55:01.234
and.
726
00:55:03.454 --> 00:55:05.075
727
00:55:05.500 --> 00:55:06.240
the discussion
728
00:55:06.700 --> 00:55:10.160
with, a story that I think is is interesting. I
729
00:55:10.859 --> 00:55:11.599
was at
730
00:55:12.140 --> 00:55:18.595
a Bitcoin related event, and I ended up talking to an engineer from an unnamed altcoin.
731
00:55:19.375 --> 00:55:23.235
And we were discussing funding, and it and it so happens that he was involved
732
00:55:23.880 --> 00:55:26.700
with a project that happened to raise some funds.
733
00:55:27.480 --> 00:55:28.700
And their
734
00:55:29.160 --> 00:55:32.620
token scheme, however it were, ended up netting them
735
00:55:32.945 --> 00:55:33.445
$300,000,000,
736
00:55:35.185 --> 00:55:35.845
of which
737
00:55:36.545 --> 00:55:39.045
that's not all developer funding, but
738
00:55:39.745 --> 00:55:41.125
a lot of that would go towards
739
00:55:42.060 --> 00:55:45.280
developers and building the protocol and surrounding libraries.
740
00:55:46.300 --> 00:55:46.800
And,
741
00:55:48.380 --> 00:55:57.984
I I hadn't even heard of this particular they're not even in the top 40 and if if you if you believe in the the market cap metric. So you have a non top 40 network
742
00:55:58.525 --> 00:55:59.345
raising $300,000,000
743
00:56:00.684 --> 00:56:01.184
and
744
00:56:02.700 --> 00:56:04.400
we we don't have that sort
745
00:56:05.260 --> 00:56:06.720
of scheme in Bitcoin.
746
00:56:07.420 --> 00:56:08.240
I would say
747
00:56:08.785 --> 00:56:14.965
Bitcoin is a little bit more bottom up as opposed to some of these organizations that are top down. Mhmm. And
748
00:56:15.640 --> 00:56:22.619
the folks here on stage are part of that bottom up ground effort. And so so, Connor, to you,
749
00:56:23.425 --> 00:56:25.765
how do you guys at Spiral think about
750
00:56:26.145 --> 00:56:36.380
the prioritizing open source? Like, why put your energies there? Why is why is Spiral putting their energy there? Why is Jack getting behind it? Maybe you can talk about a little bit of the the motivation there.
751
00:56:36.920 --> 00:56:37.420
752
00:56:38.200 --> 00:56:39.340
So, I mean,
753
00:56:40.585 --> 00:56:41.325
open source
754
00:56:41.785 --> 00:56:45.245
software in general open source development in general is, like,
755
00:56:45.705 --> 00:56:48.365
very synonymous with, like, public collaboration,
756
00:56:49.870 --> 00:56:50.770
self organizing
757
00:56:51.230 --> 00:56:51.730
community.
758
00:56:52.270 --> 00:56:54.210
All of the source code is open,
759
00:56:54.830 --> 00:56:57.090
available for anyone to kind of download,
760
00:56:57.845 --> 00:56:58.984
use, modify,
761
00:56:59.365 --> 00:57:00.505
contribute to,
762
00:57:01.204 --> 00:57:03.065
and and create projects and,
763
00:57:03.684 --> 00:57:06.984
third party projects as they kind of kind of see fit.
764
00:57:07.660 --> 00:57:09.599
And I think at Square,
765
00:57:10.380 --> 00:57:14.160
Square is obviously an org a Square or Block as a as a organization
766
00:57:14.700 --> 00:57:15.359
that has
767
00:57:16.165 --> 00:57:18.985
leveraged a lot of open source tools. And,
768
00:57:20.005 --> 00:57:24.825
Jack, it's no secret that, you know, Jack is a a big advocate of Bitcoin and
769
00:57:25.310 --> 00:57:29.250
Bitcoin being very much in alignment with blocks
770
00:57:29.550 --> 00:57:30.290
and squares
771
00:57:32.244 --> 00:57:35.384
policy and agenda of economic empowerment empowerment.
772
00:57:36.164 --> 00:57:49.675
It was, very much a sense of, like, what is the best way we can contribute back to the open source ecosystem? Because like Mike just described, there is no rule model behind it. Like, a lot of these large organizations
773
00:57:49.975 --> 00:57:55.150
are using tools which we might consider, like, public goods in the in the physical world, and
774
00:57:55.630 --> 00:57:58.450
governments have very much taken on the responsibility
775
00:57:59.069 --> 00:57:59.569
of
776
00:57:59.869 --> 00:58:04.690
providing those services, whether it be, you know, the street lights, the roads, the bridges,
777
00:58:05.535 --> 00:58:07.955
military, for example, and we fund that for our taxes.
778
00:58:08.415 --> 00:58:15.120
But, I'm pretty sure everyone in this room wouldn't exactly want open source and software to be provided by their government. So
779
00:58:17.040 --> 00:58:21.300
we're we're a we're a team. We're we're an initiative that's, like, focused on
780
00:58:21.600 --> 00:58:24.580
providing funding for for open source developers,
781
00:58:25.045 --> 00:58:31.145
designers who are ultimately trying to push the Bitcoin ecosystem forward in a number of different ways, whether it be privacy,
782
00:58:32.099 --> 00:58:32.599
scalability,
783
00:58:33.460 --> 00:58:33.960
decentralization,
784
00:58:34.260 --> 00:58:40.445
developer experience, whatever it is, and just providing the support for them to kind of make those projects,
785
00:58:40.825 --> 00:58:43.885
a reality and sustainable over the over the long term.
786
00:58:44.825 --> 00:58:48.045
787
00:58:48.345 --> 00:58:48.845
that
788
00:58:49.609 --> 00:58:52.010
at Brink, we we sort of think of this,
789
00:58:52.810 --> 00:58:54.589
sort of like a funnel. There's there's
790
00:58:54.970 --> 00:58:58.910
and there's this developer funnel for specifically for, let's say, Bitcoin
791
00:58:59.595 --> 00:59:00.095
contributing,
792
00:59:00.715 --> 00:59:05.215
and you have people who have a programming background who maybe start watching some videos,
793
00:59:06.395 --> 00:59:07.215
maybe they
794
00:59:07.560 --> 00:59:15.500
attend summer Bitcoin program. Maybe they attend chain code residency or Jimmy Song's course, and you they kind of work their way through
795
00:59:15.825 --> 00:59:27.040
sort of leveling up their their expertise in order to get to a point where you could be funded by somebody like a spiral, and I'm sure there's similar funnels for non Bitcoin core contributing.
796
00:59:28.300 --> 00:59:28.800
But
797
00:59:29.260 --> 00:59:34.535
how do you get people interested? You know, Adi, you you guys are focused on university students
798
00:59:34.915 --> 00:59:37.655
in terms of that funnel that I sort of outlined.
799
00:59:38.035 --> 00:59:39.735
Why focus on that demographic?
800
00:59:40.350 --> 00:59:40.850
801
00:59:41.470 --> 00:59:46.690
You know, that's really an important question and, is at the heart of what summer of Bitcoin is all about.
802
00:59:47.390 --> 00:59:51.385
If you look at the common trajectory of a university student today,
803
00:59:52.245 --> 00:59:58.900
you know, in 1st year of their colleges, especially someone who's studying computer science and training to become a software developer.
804
00:59:59.280 --> 01:00:02.500
In in their 1st year of college, they pick up a programming language.
805
01:00:03.120 --> 01:00:11.674
By 2nd year, they're solving obscure programming puzzles online to get that internship at Google or Facebook by 3rd year. And by the time they graduate,
806
01:00:12.535 --> 01:00:26.305
the biggest aspiration is to have an assortment of big tech AI jobs in their kitty. And so they end up joining one of these big tech companies where they're delegated to a team that know, is maybe resizing buttons or changing fonts every few months.
807
01:00:26.925 --> 01:00:31.825
But, of course, you know, if you're lucky, you get to join a team that harnesses people's personal data,
808
01:00:32.530 --> 01:00:37.190
while those same people feel insecure about their lives as they compare themselves to others.
809
01:00:38.370 --> 01:00:40.655
And then maybe make them feel a bit better by
810
01:00:41.215 --> 01:00:44.355
showing them ads to buy stuff that they never needed in the 1st place.
811
01:00:44.815 --> 01:00:55.630
That's the norm. The exception is, of course, if you didn't do well in programming puzzles, then you know, you compensate by telling your friends that, you're too adventurous for big tech and that you're joining a Fintech startup,
812
01:00:56.010 --> 01:01:03.405
where again, the most that you do is pry on people's private transactions and, you know, in the hope of selling them dirty credit.
813
01:01:05.145 --> 01:01:07.244
What is really not well understood is
814
01:01:07.660 --> 01:01:10.880
that joining Big Tech today is like joining Big Cola.
815
01:01:11.500 --> 01:01:15.760
Both their business models revolve around triggering the same molecule in your brain.
816
01:01:16.095 --> 01:01:18.275
And even if you keep the moral case aside,
817
01:01:18.655 --> 01:01:19.955
on the innovation front,
818
01:01:20.494 --> 01:01:30.300
you know, you can argue that, the sugar water we're drinking today is the same that it was 20 years ago. And, the search engine we use today is the same that it was 20 years ago.
819
01:01:30.895 --> 01:01:32.015
At Summer of Bitcoin,
820
01:01:32.974 --> 01:01:33.714
our message
821
01:01:34.095 --> 01:01:41.150
is, if you are in university and you're a budding technologist, you want to work on frontier technologies that flip the way the world runs.
822
01:01:41.609 --> 01:01:45.470
Working on Bitcoin today is like working on the internet in the nineties.
823
01:01:45.849 --> 01:01:47.630
It might make sense to get some.
824
01:01:48.045 --> 01:01:51.585
But not only get some, but also work on some in case it catches on.
825
01:01:57.230 --> 01:02:02.610
There's also a case to be made for, you know, focusing on university students and introducing them to Bitcoin.
826
01:02:03.865 --> 01:02:07.725
Bitcoin is a political movement as much as it is a technological movement.
827
01:02:08.345 --> 01:02:12.845
You're forced to pick a side either as a global status or as a sovereign individual.
828
01:02:13.210 --> 01:02:16.910
And, as free citizens who believe in the promise of sound money,
829
01:02:17.210 --> 01:02:21.950
we need to ensure that those in universities today are on the right side of the future
830
01:02:22.275 --> 01:02:24.535
because in fact, they are the future.
831
01:02:25.155 --> 01:02:27.095
And this is aside from the fact that
832
01:02:28.994 --> 01:02:34.570
and this is aside from the fact that, the youth is and will be an important constituency
833
01:02:35.270 --> 01:02:37.610
that, no politician can afford to ignore.
834
01:02:39.645 --> 01:02:40.045
835
01:02:40.605 --> 01:02:41.105
Adi's
836
01:02:41.484 --> 01:02:42.625
sort of talking about
837
01:02:43.724 --> 01:02:50.970
getting recruitment, getting people in early, bought in, and sort of, like, recruiting in that developer pipeline.
838
01:02:52.070 --> 01:02:54.730
In addition to recruiting, there's,
839
01:02:55.595 --> 01:02:59.535
we we share some similarities in that we need to raise funds from the community.
840
01:02:59.994 --> 01:03:02.174
And so there's recruiting, there's fundraising,
841
01:03:03.035 --> 01:03:07.550
and then there's just a general awareness that there is this need and there
842
01:03:08.890 --> 01:03:12.670
is talent that is looking to be funded and there is talent that needs to be cultivated.
843
01:03:14.075 --> 01:03:15.375
Of those challenges,
844
01:03:16.395 --> 01:03:19.855
what challenges do you see from your perspective at OpenSats?
845
01:03:20.234 --> 01:03:21.695
Where where can we do better?
846
01:03:22.380 --> 01:03:23.359
Where are the challenges?
847
01:03:23.819 --> 01:03:28.559
848
01:03:29.395 --> 01:03:31.975
There's a study, I think, Okcoin released recently.
849
01:03:32.595 --> 01:03:35.175
I think, like, not a lot of people actually know
850
01:03:35.475 --> 01:03:37.335
what like, how Bitcoin is developed.
851
01:03:39.430 --> 01:03:45.769
I believe a lot of people think developers are paid or maybe there is some natural funding mechanism from mining.
852
01:03:46.595 --> 01:03:51.974
So I think like the first thing is general education and awareness to the community that this thing
853
01:03:52.355 --> 01:03:56.360
doesn't really maintain itself, like, in a in a stable way.
854
01:03:57.140 --> 01:04:02.600
You you need to let corporations, you need to let users, you need to let anyone leveraging the technology,
855
01:04:04.065 --> 01:04:15.160
You need to make sure they're aware that it's it's funded by a group of developers and designers and coders who are really just, like, not rationally acting. They are providing
856
01:04:15.619 --> 01:04:16.920
the they're providing,
857
01:04:17.940 --> 01:04:18.440
maintenance
858
01:04:18.740 --> 01:04:19.240
and,
859
01:04:19.975 --> 01:04:23.035
these things for free. No one nothing in the world is free,
860
01:04:23.575 --> 01:04:30.220
but we're we're lucky enough to have a few people out there who really care about the the mission and the vision of, you know, Satoshi,
861
01:04:31.400 --> 01:04:32.060
to actually
862
01:04:32.600 --> 01:04:36.615
build on this thing. Take like, these are some of the smartest people in the world dedicating,
863
01:04:37.155 --> 01:04:37.895
their time
864
01:04:38.275 --> 01:04:40.615
for free in in many senses. So,
865
01:04:41.475 --> 01:04:49.900
you know, I think the first thing is making sure that users, businesses, anyone leveraging the technology knows that it's important to give back to the people maintaining it.
866
01:04:50.825 --> 01:04:53.165
And then secondarily, you have these pipelines
867
01:04:53.704 --> 01:04:57.005
of maybe it's students or, you know, well trained developers
868
01:04:57.305 --> 01:04:58.525
coming into the system.
869
01:04:59.300 --> 01:05:01.320
But again, it's it's not
870
01:05:01.700 --> 01:05:04.840
economically we're we're all we're all big winners here. We're logical thinkers.
871
01:05:05.540 --> 01:05:10.425
The economically rational thing to do if you're a brilliant coder is to go work for Facebook.
872
01:05:11.125 --> 01:05:17.840
If you if you really want Bitcoin, go get a $1,000,000 a year job and buy some Bitcoin, like, screw the screw the code base. Right?
873
01:05:18.320 --> 01:05:21.520
But that's that's not what we're that's not what we're relying on.
874
01:05:22.080 --> 01:05:23.620
We need a way to,
875
01:05:24.080 --> 01:05:29.125
like, build from the ground up, like you said, to create an actual self sustaining ecosystem.
876
01:05:29.905 --> 01:05:36.590
And in order to do that, I think instead of relying on 1 or 2 large, you know, exchanges or corporations
877
01:05:36.890 --> 01:05:51.335
to do the majority of the funding, well, that's important. That moves the needle. But it's really, I think, to create a self sustaining ecosystem, you need, like, a grassroots movement where everyone gives back a little bit. If everyone who's leveraging Bitcoin, everyone who
878
01:05:51.830 --> 01:05:59.050
benefits from it, gave back just a little bit, well, then we have enough to we have enough funds, enough funding, enough training,
879
01:05:59.625 --> 01:06:02.285
to actually, like, continue to sustain the ecosystem.
880
01:06:06.585 --> 01:06:07.484
881
01:06:08.520 --> 01:06:09.500
Ben touched on
882
01:06:11.320 --> 01:06:14.860
potentially some concerns that somebody might have starting their
883
01:06:16.255 --> 01:06:18.835
open source development career, if you will.
884
01:06:19.135 --> 01:06:19.635
Financial
885
01:06:20.095 --> 01:06:20.595
was
886
01:06:20.975 --> 01:06:22.515
the example Ben gave.
887
01:06:23.010 --> 01:06:26.470
What do you hear in talking with these younger folks who
888
01:06:26.770 --> 01:06:27.750
may be considering
889
01:06:28.050 --> 01:06:32.805
a career in in open source? Like, are there concerns? What are they excited about?
890
01:06:33.665 --> 01:06:34.165
891
01:06:35.424 --> 01:06:36.724
You know, we've had about
892
01:06:37.424 --> 01:06:43.480
20,000 university students from over 50 countries around the world apply to our program this year. And
893
01:06:43.780 --> 01:06:48.760
the most common question that every student starts with is, will their governments ban Bitcoin?
894
01:06:49.865 --> 01:06:56.925
And as they go through our resources, you know, talk to us and join our seminars and, you know, study Bitcoin just like they would study TCPIP
895
01:06:57.545 --> 01:06:58.845
in a networking class.
896
01:06:59.330 --> 01:07:06.150
And remember, these are computer science students who are arguably grappling with concepts much harder than those that constitute Bitcoin.
897
01:07:06.850 --> 01:07:16.390
They quickly go from, you know, hearing about Bitcoin in the media as being this illegitimate child of technology to realizing that the Bitcoin network is, in fact,
898
01:07:16.710 --> 01:07:26.555
decentralized enough, resilient enough, secure enough that even if you were to shut down all nodes but 1, the network could still run as is and bootstrap itself again.
899
01:07:27.655 --> 01:07:32.395
That, you know, the Bitcoin protocol is in fact one of the most important
900
01:07:33.020 --> 01:07:38.480
and beautiful innovations of the 21st century that can change the course of human history.
901
01:07:38.780 --> 01:07:39.599
That understanding,
902
01:07:40.195 --> 01:07:41.575
you know, coupled with
903
01:07:41.955 --> 01:07:44.935
the energy and clairvoyance that the youth can bring to the table
904
01:07:45.315 --> 01:07:47.575
is striking and remarkable to see.
905
01:07:48.460 --> 01:07:52.720
Having said that, there's a ton of noise in the space with other crypto ecosystems,
906
01:07:53.579 --> 01:07:56.799
the lavish marketing budgets, and catchy memes.
907
01:07:57.805 --> 01:08:04.225
But, you know, so we get all kinds of questions around proof of stake and why can't we have our own coin to decentralize dentistry.
908
01:08:05.050 --> 01:08:12.510
But, those get quickly answered by themselves when they figure out why is HTTP the most dominant way of exchanging information over the Internet
909
01:08:12.835 --> 01:08:18.695
and how Bitcoin is similar in terms of being the dominant way of exchanging value over the Internet.
910
01:08:19.235 --> 01:08:20.695
We have this internal aforism
911
01:08:21.570 --> 01:08:26.070
in in in our cohorts where and it goes like blockchain has only 2 applications.
912
01:08:26.690 --> 01:08:28.950
1 is money, and the other is marketing.
913
01:08:29.970 --> 01:08:30.470
And,
914
01:08:31.145 --> 01:08:40.284
you know, you as technologists, you know, we understand that it's never the means, it's never the marketing that changes the world. It's technology that works as intended that does.
915
01:08:40.949 --> 01:08:44.409
When it comes to helping these students, you know, discover careers in Bitcoin,
916
01:08:44.790 --> 01:08:51.285
there's a ton of thought and work yet to be put in. And, and congratulations to organizations like Spiral,
917
01:08:51.745 --> 01:08:54.645
Chaincode Labs, Brink, and OpenSats for
918
01:08:55.120 --> 01:08:58.340
leading from the front line and, and showing us the way.
919
01:09:02.445 --> 01:09:06.145
920
01:09:07.085 --> 01:09:07.825
and and contribute,
921
01:09:08.205 --> 01:09:15.730
but there's also a lot of the work that Spiral's doing is is project based. And and and those projects also go through a sort of evolution
922
01:09:16.110 --> 01:09:19.010
from sort of ideation one developer onwards.
923
01:09:19.525 --> 01:09:32.460
924
01:09:32.840 --> 01:09:36.620
phase 1 very much revolves around, like, a proof of concept. So
925
01:09:37.204 --> 01:09:41.704
an individual, a team of developers have an idea that is gonna help move the ecosystem
926
01:09:42.324 --> 01:09:45.710
forward in areas of of that we talk about security, privacy,
927
01:09:46.010 --> 01:09:46.510
decentralization,
928
01:09:46.970 --> 01:09:48.350
or whatever it might be.
929
01:09:48.730 --> 01:09:53.070
And at this stage, they're very much trying to develop their project architecture.
930
01:09:54.385 --> 01:09:57.685
They will be doing some pitching to organizations
931
01:09:58.065 --> 01:09:58.885
such as ourselves,
932
01:10:00.065 --> 01:10:04.980
who would provide no strings attached funding to help them get off the ground.
933
01:10:05.520 --> 01:10:11.780
And so, like, a a successful exit from that phase might like, some alpha piece of software
934
01:10:12.445 --> 01:10:21.665
that it has a code base that makes it easy for new contributors to understand what is happening and, also contribute to it as well as perhaps wider
935
01:10:22.450 --> 01:10:24.950
buy in from the from the wider Bitcoin ecosystem.
936
01:10:25.970 --> 01:10:27.670
Phase 2 is this kind of
937
01:10:28.050 --> 01:10:28.550
community
938
01:10:29.010 --> 01:10:38.255
development process. So everyone here is very much aware that this this Bitcoin thing that we're building, this new money, has a huge community behind it helping to drive it forward.
939
01:10:38.560 --> 01:10:40.500
And, we want to see that
940
01:10:40.960 --> 01:10:43.699
developed developed for individual project projects as well.
941
01:10:44.320 --> 01:10:50.475
So projects might do this by creating a project website, which clearly outlines the vision for the project,
942
01:10:51.175 --> 01:10:54.475
helps new people understand how they can contribute, maybe outlines,
943
01:10:55.015 --> 01:11:02.700
their road map as well, and perhaps some start developing some some async communication channels, whether it be on Discord or Slack or IRC,
944
01:11:04.585 --> 01:11:10.285
as well as raising awareness for their projects as well, whether it be podcast, articles, or social media.
945
01:11:11.550 --> 01:11:19.895
And, again, a successful exit from that phase might look like they have multiple contributors who are fixing various types of bugs, adding documentation,
946
01:11:20.275 --> 01:11:21.335
or adding new features.
947
01:11:21.955 --> 01:11:30.590
Phase 3 is this kind of multi entity funded phase where we hope to see a project, fully sustainable by having multiple,
948
01:11:31.290 --> 01:11:32.510
multiple donors.
949
01:11:33.675 --> 01:11:39.055
And this might be facilitated and made a bit easier if a project starts to develop a foundation
950
01:11:39.515 --> 01:11:47.590
around their project that makes it easier for larger organizations who now see this piece of technology as, like, a critical part of their tech stack.
951
01:11:48.290 --> 01:11:48.790
And
952
01:11:49.585 --> 01:11:57.525
want to find an easy way to to donate without having to do the kind of long process of due diligence on individuals and and
953
01:11:58.100 --> 01:12:00.920
contributors maybe outside of their their jurisdiction.
954
01:12:02.580 --> 01:12:04.760
And so a successful exit from that is again,
955
01:12:05.300 --> 01:12:07.800
multiple entities fund funding a project,
956
01:12:08.215 --> 01:12:12.074
and we start to see this project being used in production environments
957
01:12:12.695 --> 01:12:26.375
close to, like, beta type type of software. And then lastly, it's like we try we want projects to be sustainable without Spiral. So if Spiral were not fund funding this project, it wouldn't collapse, and it wouldn't cause significant damage,
958
01:12:27.475 --> 01:12:28.615
to the project ever.
959
01:12:29.555 --> 01:12:38.330
And at this stage, the project's really kind of developed its own culture, its own identity, and can can truly stand alone without a single entity.
960
01:12:38.950 --> 01:12:41.770
And so we we very much look at these projects as
961
01:12:43.165 --> 01:12:46.864
active projects within the Bitcoin ecosystem that will
962
01:12:47.485 --> 01:12:50.545
be around for for the super long term and ultimately,
963
01:12:50.930 --> 01:12:59.255
you know, be a part of of of Bitcoin's Bitcoin's legacy. So that's, like, how we we we try to try to think things through and hopefully hopefully,
964
01:13:00.034 --> 01:13:03.094
you know, keep funding as as decentralized as possible.
965
01:13:04.355 --> 01:13:05.735
966
01:13:07.440 --> 01:13:12.980
one way that a company can contribute to the space is if they're using the software, they can financially
967
01:13:13.840 --> 01:13:14.660
support it.
968
01:13:15.215 --> 01:13:18.275
You're in an interesting spot because you're both
969
01:13:18.575 --> 01:13:21.715
a for profit company with a Bitcoin company and
970
01:13:22.650 --> 01:13:23.150
OpenSats
971
01:13:23.770 --> 01:13:26.110
donating on the charitable side. So
972
01:13:26.490 --> 01:13:31.950
being in that unique position, how do you when you have your Bitcoin company hat on, how do you think about
973
01:13:32.614 --> 01:13:33.114
contributing
974
01:13:33.655 --> 01:13:34.474
to the ecosystem?
975
01:13:35.655 --> 01:13:48.880
976
01:13:49.420 --> 01:13:54.075
But there's tons of ways to give back. Like, we're we're a poor start up, I can't just donate $1,000,000
977
01:13:54.695 --> 01:13:57.355
to open source, as much as I would love to.
978
01:13:57.815 --> 01:13:58.315
So
979
01:13:59.090 --> 01:14:03.110
earlier we talked about, you know, developers themselves maybe not being economically
980
01:14:03.650 --> 01:14:06.630
incentivized or it's not economically rational for them to
981
01:14:06.965 --> 01:14:09.785
pursue open source projects outside of just goodwill.
982
01:14:10.725 --> 01:14:12.965
But, like, as a company, why would it help?
983
01:14:13.525 --> 01:14:17.770
I think recruitment is a big one. I got Ben the car man and Connor in the audience. I think,
984
01:14:18.490 --> 01:14:40.290
without without us, you know, going to these hackathons, without us giving back to some of these open source projects, I'm not gonna be able to recruit them. Like, that that's what that's what drives a lot of people in this space are working on the these projects like that. I can't always just say add a widget, add a button, and they're gonna be satisfied with their job. So for me, there is some recruiting benefits, some marketing benefits.
985
01:14:41.310 --> 01:14:43.090
You know, I I also think that, like,
986
01:14:43.825 --> 01:14:56.889
when you the the beauty of open source is that you can build on it and I can build on it and we both benefit. Like, it is a public good that we both win from developing on top of. It's more secure. It's faster. It's it's better maintained.
987
01:14:57.270 --> 01:15:07.245
And so, like, as you just continue layering on as a company building on these, like, core packages, whether it's Bitcoin s or or, you know, tons of open source things that we use,
988
01:15:08.025 --> 01:15:12.210
everyone wins. And so when I give back or with with the big bang company,
989
01:15:12.670 --> 01:15:14.510
you get you get a benefit as well.
990
01:15:15.389 --> 01:15:22.265
I also think, like, there are some ways, like, especially us. We're consumer facing applications. So a little bit of what we can do is education,
991
01:15:22.725 --> 01:15:24.740
highlighting projects that we really like,
992
01:15:25.060 --> 01:15:33.160
giving bounties for, you know, things in our road map that, we just don't have time to develop. One thing that we've tried to hack together is we go to hackathons,
993
01:15:34.525 --> 01:15:56.114
and we add prizes to the end the the very end of the pool. So a lot of a lot of the issues is hackathon projects are sometimes kinda half baked. They get 80% of the way done and then no one finishes them. So, you know, as a bootstrapping startup, what I can do is go give someone another $500 or a little bit of Bitcoin to finish that off, write a blog post about it, get their actual project out there, and hopefully users on it.
994
01:15:56.735 --> 01:16:12.545
So so there's a lot of ways to give back including, like, the the one that I'm most excited about. We just, like, we rolled out referral codes, in our application. So this is an easy one. If you sign up with the, you know, the word open sats or donate, every time you make a purchase through us, a portion of your proceeds go to,
995
01:16:12.845 --> 01:16:14.705
fund, you know, Bitcoin core development.
996
01:16:15.165 --> 01:16:21.590
And so that's, like, you know, little things that just you know, we're gonna we're gonna be streaming stats towards, Bitcoin core developers,
997
01:16:21.969 --> 01:16:26.045
you know, every day, all day. And so I think it's just these little things.
998
01:16:26.445 --> 01:16:29.824
You have to get creative. Like I said, if you if you got you got a $1,000,000,000,
999
01:16:30.844 --> 01:16:33.265
just throw some money at some devs probably.
1000
01:16:34.059 --> 01:16:36.080
If if you're poor like we are,
1001
01:16:36.540 --> 01:16:44.785
you gotta get creative, but there's there's a lot of really, interesting ways to do it. And I didn't name them all, but, you know, that's that's what we've come up with so far.
1002
01:16:45.245 --> 01:16:45.745
1003
01:16:46.364 --> 01:16:48.465
we clearly have a lot to say since we're
1004
01:16:48.844 --> 01:16:49.665
over time.
1005
01:16:50.950 --> 01:17:02.945
So I I can speak on behalf of these guys. I'm sure to say if you if you wanna learn more, feel free to grab any of us after this and and we can discuss more. And I would give these guys a round of applause for the work they've been doing.
1006
01:17:36.345 --> 01:17:38.765
1007
01:17:39.305 --> 01:17:47.740
1008
01:17:48.360 --> 01:17:51.740
but, like, more specifically in the commerce space itself. So, Elise.
1009
01:17:52.445 --> 01:17:55.745
1010
01:17:56.285 --> 01:18:00.145
I'm a VC investor that's focused purely on Bitcoin. And
1011
01:18:00.525 --> 01:18:07.360
last year and this year, we've been focused a lot on lightning and how it can impact commerce in developed and emerging markets.
1012
01:18:08.505 --> 01:18:09.005
1013
01:18:09.385 --> 01:18:13.565
us developers love spending time with you, so I'm glad that you're with us.
1014
01:18:14.745 --> 01:18:16.125
I'm a rock star dev.
1015
01:18:18.670 --> 01:18:20.690
I contribute to BTC based server.
1016
01:18:21.790 --> 01:18:23.410
Started the whole thing with Nicholas,
1017
01:18:24.750 --> 01:18:25.490
and then
1018
01:18:26.165 --> 01:18:28.465
I am VP of engineering of at Strike.
1019
01:18:29.804 --> 01:18:31.985
Yay? Are there Strike people here?
1020
01:18:33.725 --> 01:18:34.225
Okay.
1021
01:18:35.290 --> 01:18:44.865
Yeah. Strike started from a small team that open source team that did Zap Wallet. I'm sure a lot of you are familiar with that. And then I was employee number 1
1022
01:18:45.405 --> 01:18:48.625
specifically for Strike, and, here I am today.
1023
01:18:50.205 --> 01:19:05.864
1024
01:19:06.329 --> 01:19:13.070
And there wasn't much of a scene there, so I wanted to try and build 1 and then make some projects which people could build, and then from that, I then developed
1025
01:19:13.449 --> 01:19:23.435
I started Ellen Bits, which is a really nice sort of wallet account system you can put in your node. It's a bit like WordPress for your node. You can extend it in any direction which is relevant to you, so if your merchant has got extensions and so on.
1026
01:19:24.380 --> 01:19:26.480
So, yeah, just a hobbyist tinkerer,
1027
01:19:27.099 --> 01:19:31.360
who's, you know, been lucky enough to kind of break new ground with some of the cool
1028
01:19:32.460 --> 01:19:32.960
lightning
1029
01:19:33.495 --> 01:19:34.315
1030
01:19:34.615 --> 01:19:36.295
to do. Cool.
1031
01:19:36.855 --> 01:19:39.755
1032
01:19:40.295 --> 01:19:44.480
We are a gaming fintech company, so we build tools for game developers and gamers
1033
01:19:45.020 --> 01:19:45.760
to enable
1034
01:19:46.220 --> 01:19:49.200
the powering of your game points, your game rewards, your game
1035
01:19:49.580 --> 01:19:51.760
assets in Bitcoin, right, through Lightning.
1036
01:19:52.415 --> 01:19:55.795
So I'm just honored to be in this panel with all these great gentlemen and
1037
01:19:56.095 --> 01:20:04.179
1038
01:20:04.880 --> 01:20:09.840
So let's get started with some, like, groundbreaking news here. So, Jack Mahler's,
1039
01:20:10.745 --> 01:20:12.844
yesterday announced, from Strike
1040
01:20:13.145 --> 01:20:14.125
some huge integrations,
1041
01:20:14.505 --> 01:20:21.140
that really, like, changed the game for even the United States, the ecommerce space, but also the physical commerce space as well.
1042
01:20:21.600 --> 01:20:29.114
Rockstar, would you like to kinda, like, give us some perspective there and, like, you know, what was the announcement and, like, how how what, you know, what does it mean to you?
1043
01:20:30.534 --> 01:20:33.514
1044
01:20:33.974 --> 01:20:40.290
culmination of all the work that happened over past 2 years and what it is, like, 10 months for me.
1045
01:20:40.909 --> 01:20:41.310
And,
1046
01:20:42.110 --> 01:20:48.715
I'm very unfortunate that this panel is, like, after Jack's speech. Last year, it was easier. It was, like, my panel, the Jack's speech
1047
01:20:49.895 --> 01:20:53.989
because it's so hard to follow after Jack. Right? You like the announcement?
1048
01:20:54.530 --> 01:20:56.310
Yeah. Yeah. Yeah.
1049
01:20:58.290 --> 01:20:58.790
So
1050
01:20:59.810 --> 01:21:00.310
it's
1051
01:21:01.170 --> 01:21:02.070
it's just,
1052
01:21:03.155 --> 01:21:05.735
again, culmination of everything that we've been doing,
1053
01:21:06.434 --> 01:21:08.775
for the last few years. And
1054
01:21:10.449 --> 01:21:14.710
as Jack was so excited, yeah, with that buying coke over tour.
1055
01:21:15.170 --> 01:21:20.085
Our yeah. We we couldn't name it like that, but it is all about that. It's about
1056
01:21:20.465 --> 01:21:22.085
having that freedom
1057
01:21:23.265 --> 01:21:26.165
to use the money that you want to use
1058
01:21:26.590 --> 01:21:28.769
and spend it how you want to spend it.
1059
01:21:29.150 --> 01:21:29.650
So
1060
01:21:30.829 --> 01:21:33.969
glad that that came out and I'm looking forward to
1061
01:21:35.725 --> 01:21:37.905
some other announcements that are coming soon.
1062
01:21:38.605 --> 01:21:42.370
1063
01:21:43.170 --> 01:21:44.870
I wanted to talk a little bit about,
1064
01:21:45.490 --> 01:21:50.470
you know, Lightning as Commerce payments. You know, we really enter this era here where
1065
01:21:50.945 --> 01:21:55.365
we haven't been able to do commerce in the way that, like, Lightning Network changes the game. We have,
1066
01:21:56.065 --> 01:21:59.365
the near instant payments of Lightning. We have micropayments,
1067
01:22:00.250 --> 01:22:08.750
Both, you know, the traditional credit card networks and even Bitcoin on chain layer itself aren't able to fully service, you know, some of the amazing use cases we can get with Lightning.
1068
01:22:09.224 --> 01:22:12.445
I'm really curious about, from your guys' perspective, all the unique,
1069
01:22:12.985 --> 01:22:27.679
you know, innovations happening in the Lightning space, just across the board. There's you we could have a whole panel just on that. But, you know, from your own experiences, like, what is really exciting that we're now able to see in in in just like the digital space itself
1070
01:22:28.235 --> 01:22:29.615
that Lightning now enables?
1071
01:22:31.195 --> 01:22:33.695
Anyone could start off with that. So, I mean,
1072
01:22:34.315 --> 01:22:37.900
1073
01:22:38.460 --> 01:22:49.045
and there's that kind of concept of scheomorphic design, like, we've got a new tool set now to do things with money we should not have been able to do, and then to try and imagine those things and and and and and and build the tools and and experiments,
1074
01:22:50.465 --> 01:22:53.125
and it's quite hard, and that's why you need sort of real world
1075
01:22:53.425 --> 01:23:08.845
use case and real world feedback from people using the technology. So most of the stuff I put was off the back of a, you know, a bar in Berlin, which accepted Bitcoin, and now you think you've got whole countries, which are accepting Bitcoin and like doing they have lightning payments. So you get all this great data coming in, which makes it a little bit easier to innovate,
1076
01:23:09.465 --> 01:23:22.475
but you're dead right, and it's a it's kind of like a snowball of ideas, so something which I was I'm really excited about with Lightning is is just being able to split payments at point of sale. So, you know, you pay for something, and then within that
1077
01:23:23.335 --> 01:23:27.790
piece of production, like a coffee shop, for example, everybody could just be paid instantly into their wallets,
1078
01:23:28.190 --> 01:23:33.890
and that's something which is only possible by using, you know, these sort of lightning transactions, but you could scale it up to, like, larger production.
1079
01:23:34.350 --> 01:23:45.315
So you could have, like, you could buy your laptop and the payment could be split to different manufacturing distribution, and it could be split down again into those different departments. And then as well as, like, it could impact via tax. So, you know, if if
1080
01:23:46.219 --> 01:23:47.840
there is a Bitcoin future,
1081
01:23:48.140 --> 01:23:54.000
then tax collection will be hard and one more easy way to collect taxes, you know, our point of sale is through value added tax,
1082
01:23:54.355 --> 01:24:06.610
and when that happens, perhaps the user could say, well, I want x amount to go here, I want x amount to go there, and it's instant tax at point of sale. So that that but imagining those kind of use cases for for for money is is very hard,
1083
01:24:07.710 --> 01:24:26.910
and this is why I like Ellen Bits. Like, a lot of that concept of splitting payments, for us, just came from an extension where Crypto Graffiti did a DJ set, then we had a QR code on the screen, people could tip, and and then if they tipped enough, they would get a download link for the song, but then every time they tip, 90% would go to the music, producer and then 90 10% would go to the DJ himself,
1084
01:24:27.315 --> 01:24:33.094
and it was just that one time when we experimented with split payments, we then experimented with it more, now we've got an extension
1085
01:24:33.395 --> 01:24:35.735
specifically for split payments. So, yeah,
1086
01:24:36.460 --> 01:24:39.119
it's it's you have all this kind of legacy,
1087
01:24:39.820 --> 01:24:43.199
baggage from the ex of what you think you can do with money,
1088
01:24:43.555 --> 01:24:46.215
and then, now we have this new type of money, this new
1089
01:24:46.515 --> 01:24:56.430
theoretically, we've known that this thing would be possible, but we have been able to have tiny, tiny, tiny, little transactions, then thinking of new designs and new projects and new things you can build on top of it is very exciting,
1090
01:24:57.130 --> 01:25:05.405
and a great place to be, you know, in the space. And that's why we saw this great innovation because obviously, you know, we're expanding it with the tool, which didn't previously exist for developers and,
1091
01:25:06.264 --> 01:25:07.244
yeah, and builders.
1092
01:25:07.850 --> 01:25:18.665
1093
01:25:19.045 --> 01:25:23.945
you know, we're just scratching the surface of what it can do, what it what is able to be done with Lightning.
1094
01:25:24.324 --> 01:25:45.590
I think an example is looking at the dot com in 2,001 and looking out, you know, right now we're streaming 8 k video games across the Internet. It doesn't matter where you are in the world and you have low latency, the people building the backbones of the Internet back in the day were not thinking of serving 8 k video games, right? They were thinking of maybe sending messages across. So I think we're just scratching the surface now with money, and money is such a societal,
1095
01:25:46.290 --> 01:25:49.670
an important piece to society, and I think that's going to revolutionize
1096
01:25:50.125 --> 01:25:53.985
much more than just money, it's going to revolutionize industries, it's going to revolutionize how society
1097
01:25:55.005 --> 01:25:58.864
and citizens interact with each other. And I think Lightning is just
1098
01:25:59.165 --> 01:26:01.920
that pivotal piece, and you're seeing that with all
1099
01:26:02.540 --> 01:26:10.495
the adoptions and announcements, Stripe, Kraken, BitPay, Robinhood, right? So it's it's really that pivotal climax piece, and I think
1100
01:26:10.955 --> 01:26:15.215
next 2 years is going to be tremendous growth for Lightning, and and we're just, you know,
1101
01:26:15.640 --> 01:26:17.740
just happy to be here building on this technology,
1102
01:26:18.120 --> 01:26:19.180
you know, with everyone.
1103
01:26:20.680 --> 01:26:25.725
1104
01:26:26.185 --> 01:26:27.065
range of,
1105
01:26:27.465 --> 01:26:28.685
experiments and projects,
1106
01:26:29.625 --> 01:26:34.845
forward. And so, for example, we're seeing the integration of Lightning payments for brick and mortar,
1107
01:26:36.140 --> 01:26:42.560
retail transactions like we saw with led by Ibex, Mercado, and El Salvador with the adoption of Bitcoin as legal tender.
1108
01:26:42.905 --> 01:26:45.405
We're seeing the same sort of happen online.
1109
01:26:45.785 --> 01:26:53.020
We are seeing experimentation now with browser extensions so that you can have your Lightning wallet sort of follow you around on the web.
1110
01:26:53.320 --> 01:26:54.620
I think that we underestimate
1111
01:26:55.080 --> 01:26:56.220
how broadly,
1112
01:26:57.560 --> 01:27:00.460
payments exist in the world. Everything where we're transacting
1113
01:27:00.985 --> 01:27:07.405
where there's some value, of course, payments is important. And through Lightning, we're able to now do that efficiently. So for instance,
1114
01:27:07.784 --> 01:27:09.510
a portfolio company that we invested in
1115
01:27:12.309 --> 01:27:16.489
Synch Chat, which I bet a lot of people in this room are familiar with, where,
1116
01:27:16.949 --> 01:27:19.289
Bitcoin can just be your native financial
1117
01:27:20.335 --> 01:27:20.915
chat, currency.
1118
01:27:21.535 --> 01:27:26.995
So it's been interesting to see opportunities emerge for entrepreneurs in the lightning space,
1119
01:27:27.695 --> 01:27:28.195
recently.
1120
01:27:30.369 --> 01:27:53.080
1121
01:27:53.460 --> 01:27:54.120
1122
01:27:54.635 --> 01:27:55.135
And,
1123
01:27:55.755 --> 01:28:00.175
although sometimes I think Bitcoin gets maligned for being less dynamic
1124
01:28:00.475 --> 01:28:02.575
or creative, we're seeing the exact
1125
01:28:03.060 --> 01:28:09.639
opposite on the venture side. So the types of moonshots that people are taking are just much more broad,
1126
01:28:10.020 --> 01:28:10.760
and ambitious.
1127
01:28:11.534 --> 01:28:19.395
Maybe, I can also bring up that it's been nice to see the design space open up through changes made at Bitcoin core level.
1128
01:28:20.010 --> 01:28:28.030
So earlier this week, we were we were just talking backstage about an announcement that came out before the conference, which was Lightning Labs' Taro announcement,
1129
01:28:29.545 --> 01:28:36.925
which was a result of something that was enabled because Taproot was activated last year on Bitcoin Core. So Taro
1130
01:28:37.600 --> 01:28:38.340
will ultimately
1131
01:28:39.040 --> 01:28:40.260
allow you to,
1132
01:28:40.960 --> 01:28:48.765
exchange stablecoins, for example, on Lightning Network, which I think will have I anticipate will have a great impact on commerce on Lightning.
1133
01:28:49.545 --> 01:28:59.000
1134
01:28:59.460 --> 01:29:07.675
which is a consensus based mechanism, we all have to agree to the way the system works. With Lightning, it is it is different, right? It is not like that. So,
1135
01:29:07.995 --> 01:29:20.775
Ben and I can have an agreement and we can exchange value on Lightning even though no one else in the network has the same agreement. And I think that is beautiful because it leads to a lot of innovations. You have things like, well, Swell, you have lnurl, you have lightning address, you have
1136
01:29:21.255 --> 01:29:24.855
lnurl POS, and these are just things built on top of lightning.
1137
01:29:25.335 --> 01:29:34.930
So it's great for innovation, but it also creates for potential segmentation, right? We're not talking about certain companies pursuing this, certain companies pursuing that, and so
1138
01:29:35.310 --> 01:29:36.450
it's just a very
1139
01:29:37.224 --> 01:29:52.420
exciting space. It's very innovative and very fast paced, you know, strike ships all the time, 70 ships all the time. It's it's it's fascinating to see the speed at which technology is evolving. And I think, again, I'm just going to say it again, I think we're just scratching the surface. Just last, I believe it was 2 weeks ago,
1140
01:29:52.720 --> 01:29:54.820
Zebedee released a product called Zebedee Streamer,
1141
01:29:55.345 --> 01:29:58.965
which basically allows any person, any content creator from
1142
01:29:59.905 --> 01:30:15.145
anywhere in the world, essentially, to put a QR code in their stream and have interactions with their audience members, right? So you're now breaking that 4th wall between your audience who used to be a passive participant of this engagement and is now using a tiny little bit of Lightning,
1143
01:30:15.525 --> 01:30:25.680
transaction to interact with you, to send you a message, and so you you break that 4th wall. And this is something that is platform agnostic, right? We're just using Lightning, it doesn't matter if you're using on Twitch or YouTube
1144
01:30:26.380 --> 01:30:44.290
or wherever it is you're streaming. This is just one of the products that allows, you know, people to interact, so you can get your audience in Japan, can help you in your guild, in your quest, or in your in your stream if you're in the United States or in your Brazil or in India. Right? So the beauty of Bitcoin being global
1145
01:30:44.665 --> 01:30:54.850
enables for these types of innovations, which weren't possible before. You can't easily send a dollar to your friend in Japan. How does that actually work? Right? And with Bitcoin, you know, and with Lightning, it's instant.
1146
01:30:55.390 --> 01:30:57.170
So I think that's that's a very exciting
1147
01:30:57.710 --> 01:30:58.770
1148
01:30:59.615 --> 01:31:02.595
1149
01:31:02.975 --> 01:31:04.755
like with the, video streamer,
1150
01:31:05.695 --> 01:31:13.610
so, with ln euro pay, so that you're using ln euro and with lnurl pay as part of the stand where you can attack attach a memo
1151
01:31:13.989 --> 01:31:17.530
note. And for for most use cases, that's not really very useful,
1152
01:31:18.725 --> 01:31:21.305
or people weren't using it early on. Whereas,
1153
01:31:21.845 --> 01:31:39.645
because I but we got a similar sort of extension in LN Bits, And then having been able to pay a note and then on your pay and then write a little note. And then for the the the, you know, the the viewer of of YouTube stream, for example, being able to see that comment pop up in the video with a little animated GIF or something is very cool.
1154
01:31:39.950 --> 01:31:49.795
And then that means so it kind of guides the the direction of, you know, what sort of stuff is what sort because I don't know, as a wallet standard, obviously, the wallets need to implement these things.
1155
01:31:50.175 --> 01:31:56.435
So it's almost like chicken and egg, like, without them implementing, you can't build Right. For those for that for those implementations,
1156
01:31:57.420 --> 01:32:03.840
but then, you know, without you building something to show that there's a need for it, then they're not gonna implement it. So it's it's a really interesting kind of
1157
01:32:04.735 --> 01:32:06.915
watching watching those protocols kind of evolve,
1158
01:32:07.375 --> 01:32:11.235
1159
01:32:11.535 --> 01:32:15.100
Because for me, the biggest thing is not not just about technology,
1160
01:32:15.480 --> 01:32:23.454
but about companies growing. That's when you were saying there were new companies getting started, it'll ease you. Also, like, existing companies, when you look at Strike
1161
01:32:23.994 --> 01:32:27.534
as a company growing I don't know. Where where are my Strike employees?
1162
01:32:28.420 --> 01:32:29.320
There we go.
1163
01:32:29.780 --> 01:32:33.080
So you see oh, over there over there. We're everywhere.
1164
01:32:33.460 --> 01:32:35.400
But there is, like, Manuela, Frank,
1165
01:32:36.125 --> 01:32:37.985
Casey, Joshua, Pablo.
1166
01:32:38.445 --> 01:32:45.185
Like, all this exciting talent that's joining not from, you know, companies you never heard of, but these are people that are joining
1167
01:32:46.510 --> 01:32:50.530
from either companies that are still not in the game, but will be like Google,
1168
01:32:50.989 --> 01:32:54.130
or companies that are getting into the game like Robinhood.
1169
01:32:54.815 --> 01:32:55.315
So
1170
01:32:55.695 --> 01:32:57.635
I'm really excited that Lightning
1171
01:32:58.095 --> 01:33:02.915
as a protocol is facilitating all of that and I'm looking forward to see how things will develop.
1172
01:33:03.780 --> 01:33:21.320
1173
01:33:21.700 --> 01:33:32.825
You know, Andre, do you want to kind of, like, you know, get into that a little bit more? Now you have gaming communities probably all around the world. Right? How has, how has being able to stream, you know, micropayments, being able to,
1174
01:33:33.365 --> 01:33:48.545
you know, have 2 users that don't know each other on complete side of the world. How has this impacted their lives? And and and, you know, down the panel, we can get in, like, El Salvador and other emerging markets are use using it. Yeah. I think for for us specifically at Zebedee, we actually have a very large,
1175
01:33:49.085 --> 01:33:51.825
1176
01:33:52.410 --> 01:33:56.750
We recently announced an integration with BIPA, which is a Lightning based exchange in Brazil,
1177
01:33:57.290 --> 01:34:03.284
and that in that integration, you actually can receive your SATs inside of Zebedee by playing games, by winning tournaments,
1178
01:34:03.585 --> 01:34:08.150
and then you can, you know, one button click send to your Beeper account, which automatically
1179
01:34:08.610 --> 01:34:20.105
FX converts into Brazilian reais, right? So we're talking about using Lightning as the rail in between and at the Edge nodes you can use FX conversions. So, what we're seeing in Brazil is that,
1180
01:34:20.824 --> 01:34:22.525
Brazil is one of the most connected
1181
01:34:23.304 --> 01:34:25.885
countries when it comes to people that have access to the Internet.
1182
01:34:26.390 --> 01:34:31.370
Everyone has smartphones, etcetera, and it's a huge gaming, you know, community as well. So
1183
01:34:32.070 --> 01:34:35.370
folks are playing games powered by Zebedee, and they're earning Satoshis,
1184
01:34:35.825 --> 01:34:38.165
and while these are primarily microtransactions,
1185
01:34:38.545 --> 01:34:42.085
and we're talking a 100, 200, a 1000, a couple 1000 Satoshis,
1186
01:34:42.785 --> 01:35:04.369
it's not actually micro. The impact is actually macro. What we're seeing is that people are accumulating these Satoshis, and whenever they're ready, whether they want to use the Satoshis themselves, the Bitcoin itself, or they want to transfer back to the Brazilian reais, they can do that, and the impact is is very measurable. We we have seen people pay their rents. We have people pay their grocery stores. We have people, you know, buy buy medicine for family members,
1187
01:35:04.670 --> 01:35:10.449
and this is all enabled by, you know, the ability of having money that is global. We are an American company,
1188
01:35:10.915 --> 01:35:30.244
American based company. We couldn't do that if you know, to to someone in Brazil because we can't easily send that value across to them. Right? And now in Bitcoin with Lightning, Lightning is is digital money, it's it's programmable money and it lives on the Internet. Right? So all of that is possible and the impact is very real. Brazil is just the first, you know, country that we're seeing that that big change is happening,
1189
01:35:30.625 --> 01:35:46.435
for us in the gaming industry, but I think there's there's many, many more. I think, you know, nations in the African continent are are you know, emerging markets are exploding through the roof, adoption and, you know, financial inclusion and all of that. So I think it's I'm gonna repeat myself. We're just scratching the surface.
1190
01:35:46.975 --> 01:35:56.300
Lightning is going to essentially take over. It's going to be the story that we're going to be talking about for the next 5 to 10 years, and it's great to be here at the very beginning. Right? I think that's where we're headed.
1191
01:35:58.280 --> 01:36:13.540
1192
01:36:17.005 --> 01:36:17.905
1193
01:36:18.284 --> 01:36:21.885
that whole story is, yeah, very personal for me because, yeah, it was
1194
01:36:22.364 --> 01:36:29.340
on the inside, this whole thing was happening. But for me, the fact that, you know, one of us, a Bitcoiner like Jack,
1195
01:36:29.800 --> 01:36:31.740
can go to El Salvador and
1196
01:36:32.324 --> 01:36:32.824
practically
1197
01:36:33.284 --> 01:36:36.185
change the change the trajectory of
1198
01:36:36.885 --> 01:36:39.385
history of a country and get them to
1199
01:36:39.685 --> 01:36:41.065
adopt that first.
1200
01:36:42.810 --> 01:36:46.810
Bitcoin as a link legal tender bill is is just amazing. And,
1201
01:36:47.930 --> 01:36:50.190
as Andre is saying, with scratching the surface,
1202
01:36:50.570 --> 01:36:51.070
leave.
1203
01:36:52.395 --> 01:36:54.095
Yeah. That's just 1st domino.
1204
01:36:55.835 --> 01:37:02.760
And for us that hey. Yeah. For us that have been in midpoint for so long, it's just something that we have been expecting because
1205
01:37:03.460 --> 01:37:05.560
state and money will be separated.
1206
01:37:05.940 --> 01:37:06.440
1207
01:37:07.460 --> 01:37:07.960
1208
01:37:10.065 --> 01:37:10.805
1209
01:37:11.905 --> 01:37:14.165
1210
01:37:14.545 --> 01:37:14.945
and,
1211
01:37:15.665 --> 01:37:16.965
we are going to
1212
01:37:17.350 --> 01:37:21.610
fix the money, fix the world. Because when you see, for example, what happened
1213
01:37:21.910 --> 01:37:23.449
in Canada, I mean, it's
1214
01:37:24.150 --> 01:37:26.010
just crazy that you have
1215
01:37:26.485 --> 01:37:26.985
people
1216
01:37:27.525 --> 01:37:36.710
honking, people donating for people to honk, and it's not even that people that are honking are getting their bank account shut down. It's people that send $20
1217
01:37:37.330 --> 01:37:38.470
to them. And
1218
01:37:39.810 --> 01:37:40.310
so
1219
01:37:41.125 --> 01:37:47.065
I understand politicians and they are trying to, you know, keep keep things running, keep
1220
01:37:47.900 --> 01:37:55.360
fulfilling promises that got them elected, but I mean, come on. You know? At at certain point, you need to realize you are
1221
01:37:55.764 --> 01:37:58.505
not going to make it and look to solutions,
1222
01:37:59.525 --> 01:38:02.744
not just invent problems to stay in power. And
1223
01:38:03.890 --> 01:38:06.630
I would even expand that beyond countries like
1224
01:38:07.650 --> 01:38:08.230
it's even
1225
01:38:08.610 --> 01:38:11.830
when you see what's happening with Bitcoin and so many people
1226
01:38:13.635 --> 01:38:16.935
trying to control Bitcoin and narrative around Bitcoin.
1227
01:38:17.395 --> 01:38:20.215
What they need to hear and understand is that
1228
01:38:21.239 --> 01:38:23.420
you know, Bitcoin doesn't need you,
1229
01:38:23.800 --> 01:38:24.860
you need Bitcoin.
1230
01:38:25.480 --> 01:38:26.380
So yeah.
1231
01:38:27.080 --> 01:38:27.580
Right.
1232
01:38:29.574 --> 01:38:30.635
Mister Wonderful,
1233
01:38:30.935 --> 01:38:31.915
he is GBS.
1234
01:38:32.295 --> 01:38:38.670
I mean, man, we don't need you. You know? We if if we need, we we have Peter Thiel. Like, thank you very much.
1235
01:38:39.210 --> 01:38:40.270
So yeah.
1236
01:38:42.330 --> 01:38:43.070
Thank you.
1237
01:38:43.530 --> 01:38:44.030
And
1238
01:38:46.205 --> 01:38:49.824
I look at math always and go with, you know,
1239
01:38:50.685 --> 01:38:52.145
stay humble. So
1240
01:38:52.719 --> 01:38:55.060
I'll, yeah, I'll stay up. I'll stand there.
1241
01:38:56.639 --> 01:38:57.119
1242
01:38:57.440 --> 01:38:58.980
I'd like to kinda get into,
1243
01:38:59.360 --> 01:39:15.890
the little bit of the different roles that we have here on on this panel today, you know, we have, you know, we have custodians, like, servicing Lightning payments on behalf of users. We have open source tooling for self sovereign individuals to actually, you know, do Lightning payments on their own, both sending and receiving.
1244
01:39:16.190 --> 01:39:20.765
And we have a VC here, Elise, you know, investing in some of the, you know, most groundbreaking,
1245
01:39:21.705 --> 01:39:33.710
companies, you know, moving at lightning speed, and, like, a technological level that, like, we really don't see so much in in the real world. So I'd love to kind of just hear the the importance of, like, each of your roles that you have,
1246
01:39:34.330 --> 01:39:47.320
in lightning here and and, you know, even maybe the dichotomy between, you know, custodians and and open source development. So like, Bin, do you wanna like kind of talk about like some of the open source tooling that, like, you have created on, with Alan Bits? Yeah. So,
1247
01:39:47.719 --> 01:39:54.300
1248
01:39:54.715 --> 01:40:00.815
or you can run it for the whole world if you want to and be custodian for other people's funds, then obviously you'll have to tackle the regulatory stuff and whatever else.
1249
01:40:01.810 --> 01:40:02.310
So
1250
01:40:02.930 --> 01:40:17.375
I I'm not I think within Bitcoin, you know, not your node, not your rules, like, you should run your own node. We need to make that as easy as possible, and we are making it as easy possible with all the great projects like Umbrella 1 and RaspiBlitz and and and then my nodes and all these sorts of things.
1251
01:40:18.700 --> 01:40:19.200
But
1252
01:40:19.820 --> 01:40:22.800
it's also okay to appreciate that some people
1253
01:40:23.100 --> 01:40:23.600
will,
1254
01:40:24.300 --> 01:40:25.440
outsource that security,
1255
01:40:26.219 --> 01:40:28.445
to somebody who they quote unquote trust,
1256
01:40:29.005 --> 01:40:32.784
And hopefully, that, you know, the amount of money which they would leave on that service would be minimal,
1257
01:40:33.485 --> 01:40:33.985
and
1258
01:40:34.525 --> 01:40:38.330
it could just be like a sort of scrub service or semi custodial
1259
01:40:38.950 --> 01:40:41.110
bit relay Bitcoin service, where Bitcoin
1260
01:40:41.670 --> 01:40:42.730
so say if you've got
1261
01:40:43.895 --> 01:40:51.435
someone offering a custodial service and then they're receiving lightning payments, then to have it just loop out to on chain when the amount gets too big,
1262
01:40:52.140 --> 01:40:58.480
then as a custodial service, maybe your security threat model is that you're just leaving, you know, a couple of 100 quid on this service.
1263
01:40:59.175 --> 01:41:10.560
And then it's like, okay, well maybe for what I'm using it for, then maybe I don't need to promote, oh, no, it's easier not to, and some people will do that. So we need to we need to be aware of them doing that, and then we need to build for them,
1264
01:41:11.100 --> 01:41:16.160
but do it in such a way that we can encourage them to then run it themselves, so it's not hard to run themselves.
1265
01:41:17.405 --> 01:41:20.465
So yeah, you have, like, you know, custodial and you have non custodial,
1266
01:41:21.005 --> 01:41:24.865
and I think a lot of companies, like, you know, like Galloway, like Allen Bits, like, we're exploring
1267
01:41:25.260 --> 01:41:44.114
stuff in the middle. You know, what's in the middle? Is it community banking? Is it sort of scrub services? Could we get, you know, all that liquidity which is sloshing around in people's lightning wallets? Could we pool it together, and then could those pools be used as a funding source for custodial service services? So, you know, in a protocol y way, it's, you know, the funds aren't being held by the service provider,
1268
01:41:45.200 --> 01:41:55.015
and then there could be some potential yield for the people who allow allow their Lightning funds to be put into that pool. So I think there's some really interesting work on decentralizing custodianship
1269
01:41:55.395 --> 01:41:57.655
and and and that murky area in the middle.
1270
01:41:58.435 --> 01:42:00.695
1271
01:42:01.270 --> 01:42:04.570
actually one of the most important pieces of Bitcoin and Lightning,
1272
01:42:05.190 --> 01:42:06.170
is the optionality.
1273
01:42:06.550 --> 01:42:24.710
Right? It's a permissionless system. You can choose how deep in the stack you go. So if you're, you know, a self sovereign individual and you want to own the entire stack and you want to be your own bank, you have that capability. You know, you can run a Bitcoin Core Node, you can run a Lightning Node, you can have channel you can do literally everything yourself.
1274
01:42:25.095 --> 01:42:39.730
I think it's a big ask to assume that each and every person in the world will eventually do that. I think the optionality is really, really important, and you having hybrid models, having custodial models, having non custodial models is one of the big value propositions of Bitcoin and Lightning.
1275
01:42:40.165 --> 01:43:07.970
You know, it's you serve your own needs, you get to serve your own needs. So, in a world where everything online and in real life can have a value attached to it, I think everyone will be involved in Bitcoin in one way or another, even if you're not running the software yourself. I think there are different use cases. You know, thinking from our side of the Zebedee side, if you're a giant games publisher, you likely don't want to run you know, your banking infrastructure yourself because of lots of regulatory
1276
01:43:08.430 --> 01:43:34.175
burdens, because of infrastructure costs and etcetera, so you're going to outsource that to a bigger custodian who's focusing on that. But if you're a general user or you're a community bank with, you know, you and your family want to have a node at home and you want to run that and manage that yourselves, you can do that, right? So this is completely different to traditional finance. You can't just get a banking license as a person and and and sort of begin being a bank yourself. Bitcoin allows for that optionality, gives you that permission,
1277
01:43:34.955 --> 01:43:36.655
permission listed in system, right,
1278
01:43:36.955 --> 01:43:49.054
and then you get to choose. If you are a sovereign individual in Bitcoin, you get to choose how far you go, how deep you go, how technical you go. Lots of people run their email servers, lots of people don't run their email services and they choose to use Gmail. Right? Lots of
1279
01:43:49.355 --> 01:44:10.275
people use accounts like Zebedee and Stripe, and lots of people will run their own Lightning nodes at home. So the optionality to me is a really important piece and it's how we're going to grow to 1,000,000 and billions of Lightning users instead of every single person having their own Node at home as an essential piece of it. Lightning is the future and we need to make it approachable and reachable to all types of users, whether you're technical or not. Right?
1280
01:44:10.655 --> 01:44:11.155
Yeah.
1281
01:44:14.710 --> 01:44:19.610
1282
01:44:20.070 --> 01:44:20.550
with,
1283
01:44:21.275 --> 01:44:24.415
strike and then non custodial with BTC based server.
1284
01:44:24.954 --> 01:44:33.870
I, often get messages of my BTC based server instance, there is this problem, that problem. So, yeah, it is about us creating the tools
1285
01:44:34.250 --> 01:44:35.070
that facilitate
1286
01:44:35.770 --> 01:44:36.430
the future.
1287
01:44:37.530 --> 01:44:38.030
And
1288
01:44:39.415 --> 01:44:40.075
to me,
1289
01:44:40.455 --> 01:44:44.875
one of the most natural use cases for Lightning is that,
1290
01:44:45.975 --> 01:44:46.875
big custodians,
1291
01:44:47.950 --> 01:44:49.170
specifically exchanges.
1292
01:44:49.790 --> 01:44:53.090
So big shout out to Jesse and Pierre
1293
01:44:53.470 --> 01:44:59.125
for Kraken Yeah. Integrating Lightning Network. Yeah. It's running large. Yeah. Because
1294
01:45:00.865 --> 01:45:02.245
for me, when we have
1295
01:45:02.945 --> 01:45:05.525
big exchanges like that, it's it's such a
1296
01:45:06.099 --> 01:45:13.880
natural use case because you don't even need to deposit in exchange and get exchange hacked, but rather, you will have your funds in channel.
1297
01:45:14.195 --> 01:45:17.255
And yeah, it can rebalance with your dirty fiat.
1298
01:45:17.715 --> 01:45:18.215
So
1299
01:45:18.995 --> 01:45:20.615
yeah, it's all about providing
1300
01:45:21.330 --> 01:45:24.150
a range of solutions and then people can pick and choose.
1301
01:45:25.810 --> 01:45:31.465
1302
01:45:31.844 --> 01:45:38.040
payment channel. So it's really nice to see the exchange is actually, you know, implementing it. Yeah. Direct channel with Mt. Gox.
1303
01:45:38.440 --> 01:45:40.940
Yeah. They could do so you could do high speed, high frequency,
1304
01:45:41.880 --> 01:45:43.900
likes to the the funds. Yeah.
1305
01:45:45.535 --> 01:45:50.275
1306
01:45:50.895 --> 01:45:53.075
1307
01:45:53.430 --> 01:45:59.610
a collaborator and resource provider, and I think of it as a service provider for the founders that we work with.
1308
01:45:59.990 --> 01:46:07.415
And then if we're doing our job well, it helps accelerate what the founder would have done without us. That's the goal.
1309
01:46:08.450 --> 01:46:11.430
I also, though, think of us as a way to organize
1310
01:46:11.810 --> 01:46:13.430
capital to provide resources
1311
01:46:13.810 --> 01:46:14.630
for growth,
1312
01:46:15.010 --> 01:46:21.075
in the field, which is more challenging in Bitcoin and Lightning than in Altcoin spaces, for example.
1313
01:46:21.695 --> 01:46:25.310
And so it's important for us to be able to talk to,
1314
01:46:25.690 --> 01:46:32.590
you know, Bitcoin OGs that has stacked a lot of Bitcoin about why they should contribute back to the innovation ecosystem,
1315
01:46:33.215 --> 01:46:36.755
but then also to folks that might not get Bitcoin yet about,
1316
01:46:37.375 --> 01:46:38.435
why they should care.
1317
01:46:38.735 --> 01:46:42.835
And on that second group, one of the catalysts for people's curiosity
1318
01:46:51.500 --> 01:46:54.285
spoke spoke around this earlier, is that because
1319
01:46:54.825 --> 01:46:56.045
it's more flexible,
1320
01:46:56.345 --> 01:47:01.940
it can meet people in communities where they're at. At. So for instance, what Zebedee is doing for gamers,
1321
01:47:02.880 --> 01:47:08.875
is banking them, basically, in a way that makes sense for the population and can't be done with traditional financial tools.
1322
01:47:09.255 --> 01:47:13.355
But it can also do that in emerging markets or for lower socioeconomic
1323
01:47:13.655 --> 01:47:15.515
status populations where traditional
1324
01:47:16.120 --> 01:47:19.820
finance can't serve them either. And so it's been,
1325
01:47:20.520 --> 01:47:22.460
so that's our job, is to recognize
1326
01:47:22.840 --> 01:47:25.100
the opportunities that the protocols present
1327
01:47:25.525 --> 01:47:33.145
to create new utility and then find the founders that are going to be able to to execute and provide for these populations.
1328
01:47:34.680 --> 01:47:37.420
1329
01:47:37.960 --> 01:47:39.900
I did want to kinda get into,
1330
01:47:40.520 --> 01:47:42.515
you know, almost the flip side of things.
1331
01:47:43.215 --> 01:47:45.795
What if, what if the Lightning Network is not,
1332
01:47:46.095 --> 01:48:06.645
the future of commerce here? Like, what if what if, Lightning Network ends up being used in other use cases? Like, is Lightning good enough the way it is? Do we need to, like, like, what needs to progress to move it to the next to the next level? It is, from there. Like, do we need additional payment protocols to be able things like Bolt 12 to be able to service some of these use cases?
1333
01:48:07.344 --> 01:48:12.179
Are there gonna be alternative, like, subnetworks within the Lightning space or even, like, additional,
1334
01:48:12.960 --> 01:48:27.590
you know, layer 2 or layer 3 solutions on top of Bitcoin? So, you know, as kinda like final thoughts here, like, what do you guys see as as Lightning as the future of commerce? Is it the future of commerce? Yeah. I can. We had a really good talk in the backstage about it. Maybe
1335
01:48:28.050 --> 01:48:32.550
1336
01:48:33.225 --> 01:48:35.805
success of payments is 77. Yeah,
1337
01:48:36.185 --> 01:48:42.045
77. And then it goes down from there. It's like but yeah, maybe maybe you can expand on that then, Al. Yeah.
1338
01:48:42.560 --> 01:48:46.900
1339
01:48:47.280 --> 01:48:58.235
right, in Bitcoin. Layer 1, we all agree on everything. It's a consensus based layer. Layer 2, we have some agreements, but like we said before, different participants can have separate agreements and and still transact value.
1340
01:48:58.710 --> 01:49:05.050
As we Stack the Layers, as we continue building the Bitcoin Stack, I think it's really important to maintain that interoperability,
1341
01:49:05.965 --> 01:49:10.225
as with things with LNURL, Lightning address, and so forth, and I think
1342
01:49:11.645 --> 01:49:12.145
if
1343
01:49:12.525 --> 01:49:24.905
we reach a scenario where certain companies are doing this, other teams are doing that, some certain people are doing this, and they can't speak to each other, you lose a very vital piece of Bitcoin, which is the ability to send money to anyone, anywhere.
1344
01:49:26.165 --> 01:49:26.665
So
1345
01:49:27.284 --> 01:49:40.614
we're working very hard for it to be the future, but there's also lots of business interests for companies, there's also incentives, there are different for certain teams. So it would be a shame if we were to split and Lightning becomes separate things to each team.
1346
01:49:40.994 --> 01:49:54.600
And that's when, in my opinion, Lightning could come to not be the holy grail that we all want it to be. So I think it's it's a matter of communication, but it's a it's a very tough problem. Right? How do we engage as community members, as company
1347
01:49:55.105 --> 01:50:02.750
companies to to agree on standards that are being built as as we're building them? Right? And Bitcoin and Lightning are are sort of
1348
01:50:03.230 --> 01:50:06.690
standardized now, but what about the rest of the things that are being built on top of it?
1349
01:50:06.990 --> 01:50:10.270
So I I think that's one of the the big interesting points. Yeah. Yeah. It's
1350
01:50:11.115 --> 01:50:13.135
1351
01:50:13.515 --> 01:50:25.320
developed which was really good with like bolt 1, bolt 2, like bolt all the way to bolt 11 and then from there, we've expanded. And now we are at this point where will we sit down and talk about specifications,
1352
01:50:25.620 --> 01:50:28.440
improve them, or, like, what will be the path forward?
1353
01:50:29.415 --> 01:50:30.715
Because for me,
1354
01:50:31.574 --> 01:50:36.390
you know, maybe maybe payments is not the future of lightning. Maybe tokens are.
1355
01:50:37.190 --> 01:50:37.770
You know?
1356
01:50:38.150 --> 01:50:38.810
I offer
1357
01:50:39.110 --> 01:50:40.330
that thought to you.
1358
01:50:41.590 --> 01:50:45.930
What I am really excited about though is alternative layers too. So
1359
01:50:46.925 --> 01:50:47.425
CoinPool
1360
01:50:47.804 --> 01:50:50.065
as a proposal has came out.
1361
01:50:50.685 --> 01:51:02.415
And, I see that in future, there will be a lot of development there because there are such such natural use cases for that. As someone working on BTC pay server, it's like, if you
1362
01:51:02.875 --> 01:51:05.135
just overpay your merchant now
1363
01:51:05.515 --> 01:51:07.855
you're masking the amount that you pay to merchant
1364
01:51:08.155 --> 01:51:14.690
and only merchant knows it, can blank it out. And whatever you overpay can now become a part of the pool.
1365
01:51:14.990 --> 01:51:17.650
So sort of like what samurai is doing.
1366
01:51:19.195 --> 01:51:23.375
But let's see. Yeah. Let's see. And, invitation. If there are any more
1367
01:51:23.755 --> 01:51:25.935
NIMs like me, shadowy supercoders,
1368
01:51:26.800 --> 01:51:30.659
come to b t c pace server matter most, then let's talk about coin.
1369
01:51:32.640 --> 01:51:35.140
1370
01:51:35.575 --> 01:51:39.835
Lightning for payments and make Lightning payments more reliable,
1371
01:51:40.935 --> 01:51:47.659
including in when there's multiple hops in the payment is being built now. So Lightning is still early. There's an opportunity
1372
01:51:47.960 --> 01:51:48.460
for,
1373
01:51:48.920 --> 01:51:53.420
that many companies have described, for instance, voltage recently, I think, at this conference.
1374
01:51:53.825 --> 01:51:54.645
There's an opportunity
1375
01:51:55.425 --> 01:51:56.165
to be more,
1376
01:51:56.945 --> 01:52:00.085
efficient in how you manage your nodes and channels,
1377
01:52:00.545 --> 01:52:07.360
and businesses have the same opportunity. And so I think it's one of the strengths about the Bitcoin community is that we're really,
1378
01:52:07.920 --> 01:52:24.740
self evaluative. So we're hard we're hard on ourselves. We critique ourselves. And I think that makes us much stronger, but we also have to remember that it's just very early. And so some of the picks and shovels that need to be built for lightning to be the future of commerce are being built today. We're trying to fund them.
1379
01:52:25.120 --> 01:52:36.324
One of the things that makes me most bullish, though, about Lightning for the future of commerce is to see the sort of feedback loop that companies like Zebedee or Strike,
1380
01:52:37.040 --> 01:52:43.540
Ibex Mercado, Lightning Labs have been using in terms of the adoption and infrastructure cycle.
1381
01:52:44.055 --> 01:52:46.795
And so, for instance, we saw in El Salvador,
1382
01:52:47.735 --> 01:52:51.435
a real, like, love and appreciation for lightning the protocol.
1383
01:52:51.830 --> 01:52:54.810
And then we saw perhaps some difficulty or challenge,
1384
01:52:55.590 --> 01:52:58.570
for emerging markets where households might have,
1385
01:52:59.325 --> 01:53:06.065
you know, a a one ratio of how much they make and how much they need to spend each month, it's harder to tolerate Bitcoin's volatility,
1386
01:53:07.400 --> 01:53:18.575
at least now before we're in a a you know, before everything's denominated in Bitcoin. And so as part of that feedback loop, we see companies thinking about how to offer the protocol without exposing
1387
01:53:19.215 --> 01:53:24.035
forcing exposure to Bitcoin's volatility. And so those sorts of quick iterative,
1388
01:53:24.719 --> 01:53:26.739
loops based on feedback from adoption
1389
01:53:27.119 --> 01:53:32.020
will, I I think, position Lightning to be in a really good place to dominate commerce in the future.
1390
01:53:32.455 --> 01:53:33.655
1391
01:53:34.295 --> 01:53:40.715
sorry. I think that, Lightning any money, medium and exchange money, which we're gonna be using in the future, will be built using Lightning.
1392
01:53:41.210 --> 01:53:46.190
Currently, we're just at the stage where it's, you know, messy and there's all this, you know, it's
1393
01:53:46.490 --> 01:53:50.030
the free and open source way, isn't it? You're making the sausage in public,
1394
01:53:50.534 --> 01:53:59.034
and everyone can see all the ingredients which go into it, and it's messy. It's not like a closed source system. So it seems very chaotic, and it seems like things are breaking, aren't working, and then you have payment failures.
1395
01:54:00.110 --> 01:54:01.010
But, you know,
1396
01:54:01.469 --> 01:54:10.475
the reason people have payment failures is because they haven't balanced their channels properly, and now there's always great services which are exploring how to do that in a more automated way and, you know, solutions
1397
01:54:10.855 --> 01:54:11.995
for fixing that.
1398
01:54:12.935 --> 01:54:23.420
So, yeah, like and this is what I was saying before about the, you know, having real world use gives you all that great feedback, like in El Salvador. The thing which is obvious for anyone who went there was the payment rails, fantastic.
1399
01:54:23.735 --> 01:54:27.034
Medium of exchange sucks because you got the volatility. It's the volatility of Bitcoin,
1400
01:54:27.655 --> 01:54:39.889
and then we know one day that Bitcoin will have enough liquidity, so it won't be volatile, but then how will it get there unless people are using it as a stable medium of exchange? So the idea of these stable coins, which can bring in Bitcoin liquidity,
1401
01:54:40.590 --> 01:54:41.810
which we can use temporarily
1402
01:54:42.545 --> 01:54:48.165
and so we get to that, you know, mass where, the Bitcoin price just can't move because it's so incredibly liquid.
1403
01:54:48.625 --> 01:54:57.220
1404
01:54:57.840 --> 01:54:59.005
1405
01:55:50.679 --> 01:55:51.420
1406
01:55:52.920 --> 01:55:56.140
1407
01:55:56.565 --> 01:55:58.665
Hello? Can you hear me? Testing 12.
1408
01:56:00.325 --> 01:56:04.430
Testing 12. Here we go. Line up over here. Oh, I can see us.
1409
01:56:05.630 --> 01:56:10.290
Hello? Testing 12? Test testing 1. Yeah. What's up? Can you guys hear me okay?
1410
01:56:11.995 --> 01:56:18.315
Cool. So this is the mempools panel. My name is Wiz. I'm the co founder of the mempool open source project and,
1411
01:56:18.795 --> 01:56:20.255
operator of the mempool.space
1412
01:56:21.360 --> 01:56:22.500
block explorer website.
1413
01:56:22.880 --> 01:56:24.900
And, this is the mempool panel where we're gonna
1414
01:56:25.280 --> 01:56:28.340
bore you guys to death. We'll blab on for hours about the mempool.
1415
01:56:29.625 --> 01:56:37.325
These are some really cool shadowy supercoder, cypherpunk people. We're very fortunate to have here today. Why don't you introduce yourself?
1416
01:56:38.340 --> 01:56:41.060
1417
01:56:41.460 --> 01:56:44.119
founder and CEO of Petri Phil. Yeah.
1418
01:56:44.420 --> 01:56:47.719
Many of you probably know we do we let you buy anything you want with.
1419
01:56:51.114 --> 01:56:52.735
1420
01:56:53.435 --> 01:56:54.415
My name is Gloria.
1421
01:56:54.955 --> 01:56:56.895
I work on Bitcoin Core,
1422
01:56:57.380 --> 01:56:58.600
mostly in the mempool
1423
01:56:59.380 --> 01:56:59.880
codebase
1424
01:57:00.260 --> 01:57:04.680
and surrounding areas such as mempool validation, transaction relay, and mining.
1425
01:57:06.485 --> 01:57:15.284
When I say as a preface. When I say the mempool, people often on Twitter say I don't know what I'm talking about. I mean the mempool as in the code base area, just just to say
1426
01:57:16.870 --> 01:57:22.490
And I'm founded by Brink, which is a nonprofit dedicated to Bitcoin research and development.
1427
01:57:24.435 --> 01:57:38.920
1428
01:57:39.300 --> 01:57:42.360
So the mempool is an abstract concept that just
1429
01:57:42.925 --> 01:57:43.985
treats this overlap.
1430
01:57:45.485 --> 01:57:51.265
And I I used to stare a lot more at the mempool when I was at BIPCO as a back end
1431
01:57:52.560 --> 01:57:53.620
coins team member,
1432
01:57:54.320 --> 01:58:02.020
because we had so many customers that would get stuck transactions or just needed advice when and how they should send their transactions.
1433
01:58:03.505 --> 01:58:05.684
Now I'm at Chaincode Labs
1434
01:58:06.224 --> 01:58:08.804
and while I'm still interested in mempool and,
1435
01:58:09.264 --> 01:58:12.320
yeah, I sometimes do the mempool weather report.
1436
01:58:13.020 --> 01:58:16.239
1437
01:58:16.699 --> 01:58:21.985
You haven't had you haven't done any while though. Maybe we maybe if we ask real nice, they'll do one for us today.
1438
01:58:23.165 --> 01:58:25.105
But let's start with the the basics.
1439
01:58:25.645 --> 01:58:27.345
Sergei, do you do you wanna like
1440
01:58:27.679 --> 01:58:29.699
just break it down for everyone who's
1441
01:58:30.159 --> 01:58:32.100
not already familiar? What is a mempool?
1442
01:58:33.199 --> 01:58:35.060
Why do Bitcoin nodes have them?
1443
01:58:35.775 --> 01:58:37.395
How do they work? Why are we so
1444
01:58:37.695 --> 01:58:38.915
interested in the mempools?
1445
01:58:40.335 --> 01:58:42.435
1446
01:58:44.190 --> 01:58:49.969
the basic thing is that that, you know, when you send the Bitcoin transaction, it doesn't go right into a block. Right?
1447
01:58:51.515 --> 01:58:54.495
Where does it go? It goes into the mempool. So the mempool is,
1448
01:58:54.875 --> 01:58:57.935
is the the pool of transactions that are, waiting
1449
01:58:58.315 --> 01:59:00.415
to be performed into a block.
1450
01:59:01.020 --> 01:59:05.360
A Bitcoin node will receive a transaction. We will check if it's valid, put it in the mempool,
1451
01:59:05.739 --> 01:59:09.895
and we will have written this stuff, and they'll pass it around to all the other Bitcoin,
1452
01:59:10.595 --> 01:59:12.435
nodes that it knows of. So there's,
1453
01:59:13.475 --> 01:59:19.409
each has its own perspective, but there's also some level of shared knowledge of what are the transactions that are
1454
01:59:20.030 --> 01:59:21.090
waiting to be
1455
01:59:21.710 --> 01:59:22.210
confirmed.
1456
01:59:22.670 --> 01:59:24.130
And and so,
1457
01:59:24.485 --> 01:59:26.745
I mean, from my perspective as
1458
01:59:30.085 --> 01:59:32.265
CEO technical CEO of
1459
01:59:32.725 --> 01:59:33.740
a company that makes
1460
01:59:34.460 --> 01:59:38.000
many Bitcoin transactions and have customers making Bitcoin transactions to us.
1461
01:59:38.300 --> 01:59:39.840
Especially back in 2017,
1462
01:59:40.940 --> 01:59:43.440
when the transaction fees were really high, it became,
1463
01:59:44.065 --> 01:59:47.605
I mean, really financially important because we were spending 1,000
1464
01:59:48.065 --> 01:59:49.925
and tens of 1,000 even on dollars
1465
01:59:50.225 --> 01:59:52.805
on transaction fees almost on a daily basis.
1466
01:59:53.230 --> 02:00:03.705
And so it created a strong incentive to, like, keep an eye, right, because the most important thing is that Demandpool is sorted by the fee rates, right? So that transaction that has a higher transaction fee
1467
02:00:04.085 --> 02:00:07.705
will be sorted higher, and it's going to be prioritized first by the miners,
1468
02:00:08.085 --> 02:00:11.760
which are then working based on you know, financial incentives.
1469
02:00:12.460 --> 02:00:15.400
Right? But then it becomes important to,
1470
02:00:15.780 --> 02:00:24.295
you know, to set a fee that is just high enough, but not too high because then you're wasting money, right, but not too low because then the transaction is not going to go through
1471
02:00:24.595 --> 02:00:27.140
maybe ever or maybe in a long time, right? And
1472
02:00:27.440 --> 02:00:28.660
so fine tuning that
1473
02:00:30.320 --> 02:00:35.380
is super important. And I mean, this is something where that's gotten infinitely better in the past years,
1474
02:00:36.495 --> 02:00:40.195
But that's kind of how my interest got sparked into it.
1475
02:00:40.575 --> 02:00:50.070
And I still do as a habit, even though the mempool isn't as crazy as it used to be. I I still watch it. I I show I was showing the people that I have it on my phone,
1476
02:00:50.450 --> 02:00:52.630
yeah, you know, in my, in my Safari.
1477
02:00:54.525 --> 02:01:01.425
Yeah, just to keep an eye on, like because you can see, you know, you can see a lot of stuff in the main poll of, like, what is going on? Who's making the transactions?
1478
02:01:02.350 --> 02:01:17.145
1479
02:01:17.685 --> 02:01:18.185
area
1480
02:01:18.750 --> 02:01:20.930
to monitor and and visualize. Right?
1481
02:01:21.470 --> 02:01:27.570
But one thing you mentioned that was really interesting is, how the high the transactions fees got last year.
1482
02:01:29.025 --> 02:01:31.205
Actually, this is a good question for Merck.
1483
02:01:31.665 --> 02:01:33.585
And maybe I think we have a slide for this,
1484
02:01:34.065 --> 02:01:36.565
the history of the last, last year.
1485
02:01:36.960 --> 02:01:38.800
Could you guys show that first slide? It's,
1486
02:01:39.440 --> 02:01:43.300
it's basically the, the BEM pool chart of the last 3 years.
1487
02:01:44.800 --> 02:02:01.470
1488
02:02:01.930 --> 02:02:07.935
So there was always at least one block worth of transactions waiting to be confirmed. And,
1489
02:02:08.635 --> 02:02:10.415
for some time of that, even
1490
02:02:10.795 --> 02:02:13.135
the default mempool limit overflowed.
1491
02:02:13.630 --> 02:02:16.690
I think we are gonna touch on that a little later maybe. And,
1492
02:02:17.630 --> 02:02:21.170
so the colors that you see here, hopefully yes.
1493
02:02:23.075 --> 02:02:29.575
So the the lowest bar is, you see color bands here. Right? And the color bands are fee rates,
1494
02:02:30.035 --> 02:02:30.430
and
1495
02:02:30.910 --> 02:02:36.050
the size of the bands indicate how much data is waiting to be included in blocks.
1496
02:02:36.590 --> 02:02:39.490
So at the bottom, you have this pinkish tone
1497
02:02:40.245 --> 02:02:41.205
there. That's,
1498
02:02:41.685 --> 02:02:48.345
just over default min relay fee, which is 1 satoshi per v byte of transaction data.
1499
02:02:48.840 --> 02:02:53.320
And then it I think yellow goes up to, like, 30, 40, or even
1500
02:02:54.520 --> 02:02:55.020
1501
02:02:55.480 --> 02:02:57.500
1502
02:02:59.094 --> 02:03:05.675
generally, the the mempool is just a visualize or this this chart we're looking here at here is a visualization
1503
02:03:06.135 --> 02:03:06.635
of
1504
02:03:07.119 --> 02:03:10.659
the waiting queue of payment promises
1505
02:03:11.040 --> 02:03:14.099
to be turned into payments by being included in blocks.
1506
02:03:14.715 --> 02:03:20.255
1507
02:03:21.970 --> 02:03:24.230
when we saw the fees start to rise
1508
02:03:24.850 --> 02:03:34.645
and the mempool was just congested all the time until about the Miami conference last year. Right, was right around when it when it and that during that whole time, it was just totally
1509
02:03:35.345 --> 02:03:41.880
congested. And you had sometimes you pay, like, as much as, like, 300 sats per vbyte just to get into the next block, like, 20 US
1510
02:03:42.180 --> 02:03:45.080
dollars just to do an ordinary Bitcoin transaction. It was really
1511
02:03:47.735 --> 02:03:53.114
a unique time in in Bitcoin's history, I think. We hadn't really seen that kind of sustained fee market
1512
02:03:54.140 --> 02:03:54.880
really before.
1513
02:03:55.260 --> 02:03:57.199
1514
02:03:57.820 --> 02:04:02.880
There's a common expression. There is no the mempool. And likewise, this chart that you are seeing
1515
02:04:03.205 --> 02:04:09.304
is not a canonical view of, like, the mempool of the Bitcoin network. Right? This is just whizzes node,
1516
02:04:10.324 --> 02:04:14.309
which happens to have a very large maximum pool size. But,
1517
02:04:14.869 --> 02:04:18.730
I don't know if you guys can still see oh, if you could bring up the chart again. Sorry.
1518
02:04:19.349 --> 02:04:21.449
I think it goes up to like 400
1519
02:04:22.175 --> 02:04:23.635
it goes up to like 200,000,000
1520
02:04:24.735 --> 02:04:32.349
virtual bytes. But actually, the default mempool size is 300 megabytes, and a lot of that is taken up by metadata, 75%, in fact.
1521
02:04:32.650 --> 02:04:34.349
So most mempools,
1522
02:04:35.130 --> 02:04:35.949
like ordinary
1523
02:04:36.570 --> 02:04:39.550
non wiz nodes and not mining nodes on the network
1524
02:04:39.945 --> 02:04:41.885
are only keeping up to, like, 75,
1525
02:04:42.745 --> 02:04:47.325
1,000,000 virtual bytes worth of transactions. So they actually wouldn't even see the peak of those mountains.
1526
02:04:47.750 --> 02:04:50.409
But, of course, actually, they're keeping the top,
1527
02:04:51.190 --> 02:05:04.175
1528
02:05:04.635 --> 02:05:06.574
1529
02:05:07.000 --> 02:05:09.739
they're purging all of the so okay.
1530
02:05:10.360 --> 02:05:11.260
Sergei mentioned
1531
02:05:11.719 --> 02:05:23.635
that we sort the mempool in transactions based on their fee rate. Right? And I guess the first thing I probably wanna mention is individual fee rate is not what matters. Ancestor package fee rate is what matters.
1532
02:05:24.280 --> 02:05:32.219
So in in Bitcoin, we have a unique transaction structure where it's made of inputs and outputs. Right? We all know what the UTXO
1533
02:05:33.085 --> 02:05:34.465
based structure is.
1534
02:05:36.125 --> 02:05:37.585
So you can have
1535
02:05:38.125 --> 02:05:40.945
you can have transactions dependent upon each other
1536
02:05:41.969 --> 02:05:46.070
inside of the mempool. So you can be spending trans you can be spending a UTXO
1537
02:05:46.449 --> 02:05:53.665
that doesn't exist in the blockchain, but it exists in a transaction that's still in the mempool. That makes sense. Right? Hopefully, everybody
1538
02:05:54.045 --> 02:05:59.200
1539
02:05:59.820 --> 02:06:05.200
high fee rate environment and and transactions getting purged? Like, what was the experience like for a normal
1540
02:06:05.535 --> 02:06:12.275
1541
02:06:12.710 --> 02:06:14.090
around April or so,
1542
02:06:14.710 --> 02:06:18.170
and as the mempool filled up, your transaction was probably
1543
02:06:18.550 --> 02:06:20.810
purged by most of the mempools,
1544
02:06:21.335 --> 02:06:24.534
most of the nodes' MEM pools. Right. Because there's this common,
1545
02:06:25.014 --> 02:06:25.514
1546
02:06:26.054 --> 02:06:26.454
that,
1547
02:06:27.014 --> 02:06:31.114
you can just always send a transaction at 1 SAP per v byte,
1548
02:06:31.480 --> 02:06:33.900
fee rate and eventually it'll get confirmed.
1549
02:06:34.840 --> 02:06:35.240
But,
1550
02:06:35.800 --> 02:06:40.300
this is a common misconception, right? I mean if if the mempool is constantly full,
1551
02:06:40.715 --> 02:06:43.615
your low fee transactions will get purged out of the mempool.
1552
02:06:44.235 --> 02:06:45.935
1553
02:06:46.395 --> 02:06:49.295
that, have lots of True. And they do rebroadcast.
1554
02:06:49.720 --> 02:06:54.060
Like, when it goes down, you can see, in in if you bring up the chart again,
1555
02:06:54.520 --> 02:07:12.840
it's like Follow at us. Look at the chart. Down from the peak. You can see, like, over there, it's like some of the transactions are coming back, actually. Like, in the on the right half. You can see that the pink ones are, coming back up. Right? Right. So the red color may or may not be. The red color is, like, 1 sat per vbyte,
1556
02:07:13.255 --> 02:07:16.635
1557
02:07:17.255 --> 02:07:18.075
ish? So
1558
02:07:19.175 --> 02:07:22.475
after all the higher fee rate transactions around 20,
1559
02:07:22.989 --> 02:07:24.850
SATs per vbyte got confirmed,
1560
02:07:25.630 --> 02:07:33.755
then you can see the the low fees of 1 SAT per vbyte started to get rebroadcasted in network. And So how did how did Bitrefill handle that,
1561
02:07:34.135 --> 02:07:36.475
during that time? Like, don't you guys
1562
02:07:38.055 --> 02:07:40.155
allow people to buy gift cards
1563
02:07:40.750 --> 02:07:54.985
1564
02:08:04.165 --> 02:08:04.824
2017, when
1565
02:08:05.525 --> 02:08:06.344
this was
1566
02:08:06.804 --> 02:08:20.449
even worse, crazy than it was on the chart here, yeah, it was a kind of formative time for us. We were really, like, struggling. At the time, we were mainly doing low value phone refill transactions, you know, sort of, like, the typical, like, $5, $10 transactions.
1567
02:08:21.869 --> 02:08:22.369
And
1568
02:08:23.095 --> 02:08:25.995
I mean, we've done a lot of things. You know? We developed, like,
1569
02:08:26.375 --> 02:08:31.115
that we ourselves recommend a fee rate for the customer. Right? So we,
1570
02:08:31.815 --> 02:08:33.710
like, our web server monitors
1571
02:08:34.489 --> 02:08:36.110
this or our version of
1572
02:08:36.410 --> 02:08:41.710
this, and based on that, computes a recommendation that we give to the customer. And these days, most wallets
1573
02:08:42.065 --> 02:08:43.045
do that automatically,
1574
02:08:44.385 --> 02:08:45.765
but we also sort of, like,
1575
02:08:46.145 --> 02:08:53.900
1576
02:08:54.840 --> 02:08:56.380
and send you a low fee
1577
02:08:57.000 --> 02:08:58.940
1578
02:08:59.745 --> 02:09:05.285
1579
02:09:05.985 --> 02:09:14.080
Yeah. But but if you do that, then presumably, you're you're savvy enough to to be able to fix the bad user experience yourself.
1580
02:09:15.340 --> 02:09:15.840
But,
1581
02:09:16.515 --> 02:09:23.575
I mean, the risk factor I mean, people think that Bitcoin transactions are, when they're unconfirmed, are are trivially reversible,
1582
02:09:24.100 --> 02:09:27.060
And and that's not true, at least not today.
1583
02:09:27.699 --> 02:09:32.280
1584
02:09:32.655 --> 02:09:37.635
1585
02:09:40.110 --> 02:09:43.090
double spend transactions even after they've been broadcast,
1586
02:09:43.550 --> 02:09:47.010
but you do have to really put in some effort right now.
1587
02:09:47.465 --> 02:10:06.575
1588
02:10:07.035 --> 02:10:12.815
And I mean, we've been doing this for 7 years now. I think it has happened in 7 years,
1589
02:10:13.515 --> 02:10:14.335
1 or
1590
02:10:14.800 --> 02:10:29.655
2 times, and we do, like, you know, more than a 100,000 transactions every month. Right. You know? So, like and compare that to to credit cards where you, like, standard fraud rate is, like, 5%, and and then, you know, it's, like, a cost of doing business. So and here it's, like,
1591
02:10:30.035 --> 02:10:33.830
twice ever, and, like, it was because of bugs that we fixed.
1592
02:10:34.610 --> 02:10:50.250
1593
02:10:50.630 --> 02:10:57.094
And so, yeah, I I agree that from a business perspective and planning and and, like, risk factors,
1594
02:10:57.715 --> 02:10:58.695
you you can,
1595
02:10:59.315 --> 02:11:02.295
discard that risk for the most part. But,
1596
02:11:02.920 --> 02:11:03.420
fundamentally,
1597
02:11:04.280 --> 02:11:05.980
from how the mempool works,
1598
02:11:07.560 --> 02:11:13.945
there there are some policies that help with this, but it's not actually while a transaction is unconfirmed, it is unreliable.
1599
02:11:15.445 --> 02:11:20.825
And it just so happens that the policies and the the behavior of of our
1600
02:11:21.590 --> 02:11:22.090
society,
1601
02:11:23.030 --> 02:11:24.250
our Bitcoin society,
1602
02:11:25.429 --> 02:11:27.050
tends to to confirm
1603
02:11:27.510 --> 02:11:36.235
1604
02:11:36.614 --> 02:11:49.255
1605
02:11:50.035 --> 02:11:54.670
1606
02:11:55.070 --> 02:11:55.570
notoriously
1607
02:11:56.110 --> 02:11:56.610
unreliable.
1608
02:11:57.150 --> 02:11:57.890
And there's
1609
02:11:58.270 --> 02:12:09.065
I I think I know more than anyone that there's tons of attacks and it's a dangerous place. And so when I first met you and you said you accept 0Conf transactions, we had a very heated debate
1610
02:12:10.005 --> 02:12:12.920
about whether or not that's safe. And I I think,
1611
02:12:13.960 --> 02:12:14.460
you
1612
02:12:14.760 --> 02:12:17.020
you did manage to convince me that
1613
02:12:17.560 --> 02:12:18.780
for you at least,
1614
02:12:19.640 --> 02:12:20.140
it's
1615
02:12:20.600 --> 02:12:23.185
it's it's difficult to convince
1616
02:12:23.805 --> 02:12:27.344
the logic on top of your Bitcoin operation
1617
02:12:28.125 --> 02:12:37.369
1618
02:12:37.995 --> 02:12:44.415
But for your particular threat model where you're selling gift cards of relatively small dom denominations,
1619
02:12:45.980 --> 02:12:49.760
you know, and mitigating the double spend risks. Like you said, no RBF.
1620
02:12:50.139 --> 02:12:52.865
They have to use a reasonably high fee rate,
1621
02:12:53.425 --> 02:12:54.325
etcetera, etcetera.
1622
02:12:55.185 --> 02:12:57.205
It sounds like you've figured out how to
1623
02:12:57.665 --> 02:13:06.010
1624
02:13:06.550 --> 02:13:09.265
It's advanced level kung fu. You need to have
1625
02:13:09.745 --> 02:13:11.845
people that do it and spend
1626
02:13:12.305 --> 02:13:14.565
hours figuring it out, monitoring it,
1627
02:13:14.865 --> 02:13:21.390
evaluating, improving it, and so on. Something that you can do if you're a company and you have people working on this full time. It's not something
1628
02:13:21.770 --> 02:13:28.205
for the common man, right? But there's also I mean, it depends, if you're like, if your buddy is paying you back $10
1629
02:13:28.505 --> 02:13:29.245
for lunch,
1630
02:13:29.625 --> 02:13:31.005
you don't have to sit there.
1631
02:13:31.465 --> 02:13:33.485
You can set it to the low fee transaction.
1632
02:13:34.800 --> 02:13:35.860
And in fact, for,
1633
02:13:36.639 --> 02:13:37.219
I think,
1634
02:13:37.599 --> 02:13:39.380
quite a few I mean,
1635
02:13:40.159 --> 02:13:42.260
maybe we can talk about the trustless aspect
1636
02:13:42.800 --> 02:13:49.614
because I think it's very interesting about how Bitcoin is all about the trustless. But if you actually look at most actual Bitcoin transactions,
1637
02:13:50.075 --> 02:13:53.135
there's always a very high degree of trust between the parties,
1638
02:13:53.679 --> 02:14:08.425
right, in the sense of, like, you know, hey. We pay someone's salary in Bitcoin. Right? Okay. We're not gonna double spend our employee because then it's not gonna go to work next week. Week. Also, it's unethical, and it's, like, not normal human behavior. Right? So for for, like, for a lot of transactions,
1639
02:14:08.965 --> 02:14:16.650
there is a mutual trust. Right? And in that situation, you can set the mempool fee to 1 set per byte, and it's going to confirm eventually. In worst case,
1640
02:14:17.030 --> 02:14:27.105
if it happens that suddenly there's a big spike like that, well, then you'll figure it out. You know? It's gonna be a little bit of a hassle. Yeah. I think that's the big takeaway is that the fee rate you use or
1641
02:14:27.485 --> 02:14:28.304
1642
02:14:28.679 --> 02:14:29.739
accept the transaction
1643
02:14:31.000 --> 02:14:39.994
on 0 comp or 6 comps, it all really depends on your individual threat model and use case and amount of the transact it's it really depends.
1644
02:14:40.295 --> 02:14:45.994
And so for some people, they can always send 1 SAP per vbyte. Even if it takes a year to get confirmed, they'll wait
1645
02:14:46.480 --> 02:14:50.739
because they just might be sending it between 2 of their same wallets, and they know they're not going to
1646
02:14:51.199 --> 02:14:52.579
double spend their own transaction.
1647
02:14:53.360 --> 02:14:53.860
But,
1648
02:14:54.480 --> 02:15:03.145
if I wanna say, hey. Let's let's buy a $1,000,000 worth of gift cards, I'm pretty sure you won't accept the zero comp for that. Right? But what about, layer 2 networks?
1649
02:15:03.750 --> 02:15:11.610
1650
02:15:13.885 --> 02:15:14.545
the transaction,
1651
02:15:14.845 --> 02:15:25.280
1652
02:15:25.820 --> 02:15:33.505
1653
02:15:34.045 --> 02:15:35.744
you have a particular
1654
02:15:36.045 --> 02:15:37.105
set of conditions
1655
02:15:37.790 --> 02:15:38.290
that
1656
02:15:38.590 --> 02:15:39.090
makes
1657
02:15:39.630 --> 02:15:41.250
fees extremely important
1658
02:15:41.790 --> 02:15:42.530
and dangerous.
1659
02:15:43.630 --> 02:15:57.050
So one thing is when you're doing a lightning transaction, right, you and your counterparty are negotiating the fee rate well before you're ever going to broadcast it because the whole point is you're going to exchange these transactions and payments
1660
02:15:57.430 --> 02:16:10.255
and only settle on chain if you really need to or when both of you decide to close the channel. Right? So what really goes wrong is when you have a unilateral close, as in your counterparties trying to cheat you, your counterparties went offline,
1661
02:16:10.990 --> 02:16:15.010
whatever it is. Something went wrong. So now you need to broadcast your transaction.
1662
02:16:15.550 --> 02:16:16.530
And that might be
1663
02:16:16.830 --> 02:16:26.094
hours, days, weeks after you decided what the fee rate on that transaction is going to be. And if your counterpart is trying to cheat you, there's no way you're gonna sign an RBF with them because
1664
02:16:26.750 --> 02:16:29.730
they're like, I'm trying to steal your money. Why would I give you another signature?
1665
02:16:31.230 --> 02:16:32.449
And so that combination
1666
02:16:33.550 --> 02:16:35.010
makes it quite
1667
02:16:35.835 --> 02:16:39.215
dangerous. So for example, if we go back to the second slide
1668
02:16:39.595 --> 02:16:51.119
where the fee rate the the minimum fee rate of the mempool went from, like, 1 sat per vbyte to, like, 20 sat per vbyte. Let's say you open a lightning channel and, you know, you have some HTLCs
1669
02:16:51.420 --> 02:16:51.920
going,
1670
02:16:52.565 --> 02:16:58.665
and you negotiated a fee rate of 10 or even 15 sats per vBuy on your commitment transaction.
1671
02:16:59.790 --> 02:17:00.290
But
1672
02:17:00.670 --> 02:17:03.010
then something goes wrong and you need to broadcast.
1673
02:17:03.950 --> 02:17:04.450
Well,
1674
02:17:05.229 --> 02:17:15.395
the commitment transaction will straight up not even make it into anyone's mempool. Maybe it will make it into Wiz's mempool because his is still the floor is still one Zap per vite. But for the most part,
1675
02:17:15.935 --> 02:17:19.370
it's just not gonna work. And then you say, oh, Gloria, what about CPFB?
1676
02:17:20.551 --> 02:17:29.735
Right? Commitment transactions have anchor outputs, so either counterparty in the lining channel should be able to attach a very high fee rate child to their commitment transaction.
1677
02:17:30.436 --> 02:17:30.936
And
1678
02:17:32.035 --> 02:17:32.855
news flash,
1679
02:17:33.556 --> 02:17:38.689
the first transaction will not make it in and we're actually only validating transactions
1680
02:17:38.990 --> 02:17:39.490
individually.
1681
02:17:39.870 --> 02:17:48.195
So we'll reject the first one. We'll look at the high fee child, and we'll say, well, these inputs are not available because they belong to a transaction we rejected.
1682
02:17:48.975 --> 02:17:49.635
And so
1683
02:17:50.095 --> 02:18:03.266
oops. Sorry. Neither of them are getting in. So it sounds like lightning has a pretty big security hole right now based on what you just said. Exactly. This is, this is why I'm excited to be here today to tell you everything's broken and we need to fix it.
1684
02:18:04.285 --> 02:18:06.945
No. But I I think this particular issue
1685
02:18:07.325 --> 02:18:11.665
again, we have not seen a fee rate market like that since April of last year.
1686
02:18:12.131 --> 02:18:17.511
And I'm not saying that there is a reliable attack that, you know, attackers can always execute.
1687
02:18:18.051 --> 02:18:25.535
But if you think about it as, you know, 100 of 1,000,000,000 of dollars of capital is locked into lightning contracts and other l two contracts,
1688
02:18:26.795 --> 02:18:27.935
and, you know,
1689
02:18:28.315 --> 02:18:42.325
the fee rate market or the, you know, usage of the mempool becomes less predictable. We're not able to say, oh, in one week's time or in one month's time, we know that there's gonna be room in the mempool for a 10 sat per vBuy transaction.
1690
02:18:42.865 --> 02:18:45.285
These attacks become more and more critical.
1691
02:18:46.450 --> 02:18:49.110
And again, this is on a very long time horizon.
1692
02:18:49.570 --> 02:18:50.630
Right? So as
1693
02:18:51.010 --> 02:19:00.645
as protocol developers, we're thinking about something like this, where it's like, okay, when you're building an l 2, hopefully there is a seamless interface between l 2 and l 1.
1694
02:19:01.186 --> 02:19:05.560
And I think mempool is where that security assumption really breaks down. Because
1695
02:19:05.939 --> 02:19:07.159
to to put it simply,
1696
02:19:07.779 --> 02:19:09.960
lightning and all other l two protocols
1697
02:19:10.825 --> 02:19:15.965
have a security assumption that you will always be able to mitigate counterparty risk
1698
02:19:16.825 --> 02:19:17.325
by
1699
02:19:18.280 --> 02:19:18.860
by broadcasting
1700
02:19:19.320 --> 02:19:23.340
something on chain to, you know, revoke their funds
1701
02:19:24.200 --> 02:19:32.675
or to, know, get your justice transaction in. And that assumption is not always true. It's not always false. Okay? Not to scare everyone.
1702
02:19:33.580 --> 02:19:46.885
1703
02:19:47.186 --> 02:19:54.300
such that it's relatively unthinkable, even if 2017 were to happen again, that it wouldn't,
1704
02:19:54.760 --> 02:20:05.205
even make it into people's mentals. It's it's definite I mean, you you can imagine it happening, but it's, like, it's it's unlikely. You know? Yeah. So essentially all the,
1705
02:20:05.745 --> 02:20:10.005
1706
02:20:10.899 --> 02:20:14.420
maybe to pick up your point from earlier. The only thing that has,
1707
02:20:14.820 --> 02:20:15.320
propagation
1708
02:20:16.020 --> 02:20:24.244
guarantees in Bitcoin is blocks. We guarantee that we will deliver blocks to other nodes so that everybody can catch up to the best chain tip.
1709
02:20:24.625 --> 02:20:27.045
Transactions do not have propagation guarantees.
1710
02:20:27.505 --> 02:20:31.830
We forward them at best effort. Generally, it means that all transactions
1711
02:20:32.450 --> 02:20:35.350
get to all other nodes in a minute or so.
1712
02:20:36.485 --> 02:20:40.346
And once they're in a block, of course, as part of the block, they do get propagated.
1713
02:20:40.806 --> 02:20:44.186
But before that, the unconfirmed transaction do not have guarantees.
1714
02:20:45.150 --> 02:20:50.450
But essentially, the L twos rely on the assumption that there are guarantees for transaction propagation.
1715
02:20:51.230 --> 02:21:01.825
1716
02:21:02.450 --> 02:21:05.270
steal funds out of a lightning channel during that time?
1717
02:21:05.650 --> 02:21:08.950
I guess it was April of last year. Did you see any, shenanigans?
1718
02:21:10.556 --> 02:21:13.375
1719
02:21:13.755 --> 02:21:16.415
1720
02:21:17.035 --> 02:21:17.936
and accidentally,
1721
02:21:18.395 --> 02:21:28.770
you know, their wallets started doing stuff. And so we we've, our things to slap them and and so on. And then and then the person reached out and say, hey. I'm I'm I fucked up. You know, you gotta
1722
02:21:29.075 --> 02:21:42.300
help me out, and we help out. But I think it's also, like, important to to keep in mind, again, like like we talked about that, like, a financial transaction has a level of trust. Right? So for example, at Bitrefill, like, our biggest channels are going to be,
1723
02:21:42.840 --> 02:21:48.306
with with other companies. Right? True. So we'll have a big channel or multiple channels with Stripe or Bitfinex,
1724
02:21:49.645 --> 02:21:50.145
BlueWallet,
1725
02:21:51.485 --> 02:21:53.060
Asank, and so on. Right?
1726
02:21:53.619 --> 02:21:54.840
And so it's not
1727
02:21:55.220 --> 02:22:02.135
like, you know I mean, Bitcoin is built for, like, the wild west, you know, everyone for themselves. But they can't. In in reality,
1728
02:22:02.515 --> 02:22:05.415
most of it isn't. Right? I mean, just because,
1729
02:22:05.875 --> 02:22:15.070
imaginably, we could, with a very sophisticated attack like this, you know, rob our good friends at a strike of money, doesn't mean that we do, you know, we have business
1730
02:22:16.010 --> 02:22:19.024
coming in decency and so on. So it depends.
1731
02:22:19.404 --> 02:22:29.020
And Lightning Channels have a certain trust factor in them by default, in that you kind of rely on the person, like, keeping their node up
1732
02:22:29.399 --> 02:22:35.234
and running and not doing anything stupid and so on, which is like a weak trust. Right? But there is a little bit
1733
02:22:35.774 --> 02:22:41.300
of a type of trust. You don't trust them with your money, but you trust them to not mess things up.
1734
02:22:41.859 --> 02:22:45.319
1735
02:22:45.620 --> 02:22:48.840
or maybe more broadly technologies built on top of Bitcoin where
1736
02:22:49.205 --> 02:22:51.465
there's not only the anarchist,
1737
02:22:52.165 --> 02:22:54.345
you know, trust of the base layer blockchain.
1738
02:22:54.805 --> 02:22:59.380
For example, if I had a channel open with you and for some reason my node got messed up and
1739
02:22:59.920 --> 02:23:12.845
you've had to, like, force close the channel and you got those funds, we have some kind of reputation or relationship together. I would say, hey, can you, you know, let's settle up properly. I think this is quite common, like you said, in the b to b space where
1740
02:23:13.450 --> 02:23:20.910
Bitcoin banks essentially have very large channels between each other or Bitcoin payment processors or merchants selling gift cards, etcetera.
1741
02:23:21.775 --> 02:23:24.995
And, I I think this is this is one part of the,
1742
02:23:26.095 --> 02:23:31.075
maybe to to mitigate the risk in a in a different way from from what you mentioned earlier.
1743
02:23:31.520 --> 02:23:42.726
Okay. Sure. Lightning has some security holes or threat models, maybe need to be adjusted for when the mem mempool gets full all the time. But one of these mitigations is actually the social
1744
02:23:43.266 --> 02:23:45.365
maybe capital part of it.
1745
02:23:45.745 --> 02:23:47.926
1746
02:23:48.705 --> 02:23:54.310
just maybe to play doubles advocate or to provide a perspective of someone who
1747
02:23:54.689 --> 02:23:55.990
is trying to design
1748
02:23:57.756 --> 02:24:00.176
our policy rules and our mempool
1749
02:24:00.795 --> 02:24:07.056
for the the node runners that are using a Raspberry Pi. You know, the people in countries where
1750
02:24:07.500 --> 02:24:10.960
this is the most free option for them to transact
1751
02:24:11.500 --> 02:24:14.240
and their government is actively trying to censor
1752
02:24:14.955 --> 02:24:18.255
or sorry. You know, someone is trying to censor
1753
02:24:18.715 --> 02:24:23.774
or freeze their ability to use money for whatever it is that they need,
1754
02:24:24.640 --> 02:24:26.660
that may or may not be politically,
1755
02:24:28.160 --> 02:24:32.420
accepted there. Right? Like, we want the default option to be,
1756
02:24:33.635 --> 02:24:41.735
as minimal as possible, as private as possible, as censorship resistant as possible. So, of course, there are many,
1757
02:24:42.710 --> 02:24:50.065
scenarios where there is a social aspect or there is a legal framework with which people can use to, externally
1758
02:24:50.604 --> 02:24:53.265
to the Bitcoin and lightning assumptions
1759
02:24:53.885 --> 02:24:56.305
to, you know, figure out how they're going to transact.
1760
02:24:57.211 --> 02:24:57.870
I think
1761
02:24:58.410 --> 02:25:03.391
the most private, you know, censorship position, blah, blah, option should be the default.
1762
02:25:03.905 --> 02:25:25.135
1763
02:25:25.595 --> 02:25:26.415
a sort of
1764
02:25:26.795 --> 02:25:27.454
a risk,
1765
02:25:27.994 --> 02:25:29.135
that is theoretical,
1766
02:25:29.971 --> 02:25:33.830
highly unlikely, requires a sophisticated attacker in a special set of circumstances.
1767
02:25:34.450 --> 02:25:44.176
We need to fix that risk. Right? And that's what you're doing. Yes. And and the great people at lightning and so on. Yeah. But, you know, we it's it's important to know
1768
02:25:44.530 --> 02:26:05.939
1769
02:26:06.240 --> 02:26:06.740
But,
1770
02:26:07.359 --> 02:26:13.305
yeah, it is important that it works for for well, Bitcoin is the money of enemies. Right? Taj said that.
1771
02:26:14.645 --> 02:26:19.465
1772
02:26:20.020 --> 02:26:20.520
1773
02:26:21.620 --> 02:26:34.936
I don't think that that you you do open yourself up to a little bit of abuse. If you have a lightning channel with someone, they can make it hard for you to get your money back. They can brief you for the fees for opening the channels and things like that. But, generally
1774
02:26:36.150 --> 02:26:36.971
so we have
1775
02:26:37.351 --> 02:26:44.345
the the base layer where you don't have to need a lot of trust. And then, of course, you can build business relationships
1776
02:26:44.645 --> 02:26:50.025
on that, and you can do more with that. It's sort of like we have a very simple stupid base layer in Bitcoin,
1777
02:26:50.380 --> 02:26:52.000
and then we build the complex
1778
02:26:52.540 --> 02:26:54.560
things at the edges and on top
1779
02:26:54.939 --> 02:27:00.915
because it's easier to go that direction than vice versa. Going from a trusted trust necessary
1780
02:27:01.455 --> 02:27:02.355
to an untrusted,
1781
02:27:03.056 --> 02:27:07.955
would would you want to open a bank account with somebody that you know is gonna try to steal money from you?
1782
02:27:08.561 --> 02:27:11.940
Nobody suggested that here. No. No. No. I'm I'm just illustrating.
1783
02:27:12.480 --> 02:27:23.556
1784
02:27:24.096 --> 02:27:28.080
bottom up. So, you know, we have our base layer, no trust required
1785
02:27:28.540 --> 02:27:29.520
as security
1786
02:27:29.980 --> 02:27:32.240
model is as difficult as possible.
1787
02:27:32.675 --> 02:27:40.055
And then we're slowly, you know, we're slowly building up to a scalable payment system that can handle the,
1788
02:27:40.859 --> 02:27:44.000
the thousands of transactions per second that, honestly,
1789
02:27:44.540 --> 02:27:53.765
we cannot fit into a block right now. Right? So we cannot afford to not build lightning or, you know, some scaling solution. But the way that I think we do things,
1790
02:27:54.145 --> 02:27:54.385
not
1791
02:27:55.185 --> 02:27:57.045
what I like about Bitcoin development
1792
02:27:57.620 --> 02:27:58.760
is we build bottom
1793
02:27:59.220 --> 02:28:01.479
up, and we do we put security first.
1794
02:28:01.780 --> 02:28:05.765
I think I think that's the way we should think about things and what I really like.
1795
02:28:06.725 --> 02:28:10.425
1796
02:28:10.805 --> 02:28:12.024
past of the mempool
1797
02:28:13.210 --> 02:28:17.390
historical data trends and now we just kind of touched on the present
1798
02:28:17.930 --> 02:28:19.149
state of the mempool
1799
02:28:19.770 --> 02:28:24.665
and how it affects various threat models for various use cases, but what about the future?
1800
02:28:25.285 --> 02:28:34.830
Mert, you usually give us, like, a weather report of what's going on in the mempool, like, how about a prediction? What's the future weather report for the mempool? What do you think is gonna happen? How is the mempool gonna change over time?
1801
02:28:35.690 --> 02:28:41.444
1802
02:28:42.385 --> 02:28:42.885
so,
1803
02:28:44.064 --> 02:28:52.730
from the stats that I'm seeing, I think that, the number of payments has been growing pretty steadily. The amount of money that is being sent has been growing pretty steadily.
1804
02:28:53.110 --> 02:28:57.556
And what led to this congestion in the last year was that there,
1805
02:28:58.415 --> 02:29:00.255
were just more and more transaction happening
1806
02:29:01.056 --> 02:29:01.556
transactions.
1807
02:29:01.936 --> 02:29:02.436
And,
1808
02:29:04.350 --> 02:29:04.850
eventually,
1809
02:29:06.110 --> 02:29:08.050
the block space was completely
1810
02:29:08.510 --> 02:29:12.495
getting used. And the block space supply is pretty inelastic.
1811
02:29:13.436 --> 02:29:17.775
While you're slightly below it, it'll clear every night or at least every weekend,
1812
02:29:18.290 --> 02:29:18.790
and,
1813
02:29:19.569 --> 02:29:21.990
the fees will will calm down again.
1814
02:29:22.450 --> 02:29:33.825
As soon as you overshoot a little bit and the number of transactions that get submitted to the network exceed the available block space, it'll just continue growing. Right? Because there's not enough new block space
1815
02:29:34.351 --> 02:29:36.210
to to clear it out. And
1816
02:29:36.750 --> 02:29:39.330
so we had a bit of a demand shock,
1817
02:29:40.110 --> 02:29:40.610
after
1818
02:29:41.365 --> 02:29:49.465
the market. 1st, we had a supply shock and then we had a demand shock. 1st, China kicked out their miners and, the hash rate went down by 47%,
1819
02:29:49.925 --> 02:29:51.030
I think, at the peak.
1820
02:29:51.511 --> 02:29:52.011
And,
1821
02:29:54.391 --> 02:29:56.170
then just around the same time,
1822
02:29:56.950 --> 02:30:00.650
Blockchain dotcom, who is responsible for about 30% of all transactions,
1823
02:30:01.145 --> 02:30:03.405
finally updated from paid to public key hash,
1824
02:30:04.266 --> 02:30:08.686
addresses to paid to witness public key hash. So the the inputs went from 148
1825
02:30:09.466 --> 02:30:09.966
bytes
1826
02:30:10.470 --> 02:30:19.449
to 68 vBytes on each input. So they they were less than half the size. And suddenly this being slightly over the blocks based demand
1827
02:30:19.846 --> 02:30:27.710
went to, oh, we we're like at 90 ish percent of the block space being used and fees dropped through the floor. And then
1828
02:30:28.170 --> 02:30:29.290
the the hash rate,
1829
02:30:29.770 --> 02:30:36.875
regenerated maybe even faster than some people expected. Some people were, like, it will take a year for all these companies to resettle and
1830
02:30:37.435 --> 02:30:46.070
1831
02:30:47.810 --> 02:31:10.380
1832
02:31:10.855 --> 02:31:19.755
And, keypad spend in pay to tap route is only 58 VBIZ. Mhmm. Whereas, for example, a 2 or 3 multisig, even with native segwit right now, is a 105.
1833
02:31:20.250 --> 02:31:20.750
So,
1834
02:31:21.449 --> 02:31:24.590
or or older formats are a 140 or 297
1835
02:31:25.050 --> 02:31:30.435
for legacy even. So the the demand from multisig transactions will go down
1836
02:31:30.814 --> 02:31:31.395
a bunch,
1837
02:31:31.935 --> 02:31:34.274
and then, Lightning is actually maturing
1838
02:31:34.734 --> 02:31:36.335
maybe a little quicker than than,
1839
02:31:37.460 --> 02:31:41.540
so for example, Rusty said building lightning will be a 20 year effort. And,
1840
02:31:43.061 --> 02:31:46.681
now people are reporting that they're they're routing thousands of transactions
1841
02:31:47.125 --> 02:31:50.024
only for their own node that they're administering
1842
02:31:50.484 --> 02:31:52.024
from home. So
1843
02:31:52.645 --> 02:31:53.625
I think that the
1844
02:31:54.061 --> 02:31:57.681
smaller payments will be pushed out to the payment layer to Lightning.
1845
02:31:58.061 --> 02:31:58.561
The,
1846
02:31:59.580 --> 02:32:02.881
multi sec transactions will move to these more efficient formats.
1847
02:32:03.285 --> 02:32:04.985
So for the middle
1848
02:32:05.365 --> 02:32:08.665
term, probably block space will remain relatively abundant.
1849
02:32:09.365 --> 02:32:09.865
But
1850
02:32:10.245 --> 02:32:10.985
we will,
1851
02:32:11.750 --> 02:32:14.489
if payments continue to grow and I mean,
1852
02:32:14.869 --> 02:32:17.609
conferences certainly seem to grow, then
1853
02:32:18.390 --> 02:32:23.655
we will always have some demand. And what last year showed, I think, is that
1854
02:32:25.075 --> 02:32:31.380
that transacting on Bitcoin is valuable enough for a lot of people that they were willing to pay significant fees.
1855
02:32:31.760 --> 02:32:38.500
And we have at least 2 more havings or so until the the subsidy is, gonna start to be really small.
1856
02:32:39.555 --> 02:32:41.654
1857
02:32:42.274 --> 02:32:45.814
free market economy where you have, limited supply and
1858
02:32:46.390 --> 02:32:57.115
or I guess maybe a variable supply and a variable demand. And if the demand ever exceeds the supply, then, sure, the prices go up. This is just basic economics, but will we ever see a time where
1859
02:32:57.575 --> 02:32:58.235
the demand
1860
02:32:58.615 --> 02:33:06.870
constantly exceeds the supply and the mempool is just constantly full and transactions are getting priced out essentially. Well, one thing I want to add,
1861
02:33:07.650 --> 02:33:09.750
1862
02:33:10.505 --> 02:33:18.284
is demand is not just comprised of how many people are using Bitcoin to send money. Right? And and this is this goes further than just,
1863
02:33:19.570 --> 02:33:25.190
like, oh, some of it's happening on lightning, which we don't see on chain. Or a lot of it is happening on lightning, actually.
1864
02:33:25.811 --> 02:33:28.230
And, you know, as you alluded to, there's
1865
02:33:28.675 --> 02:33:31.095
plenty of ways that wallet developers
1866
02:33:31.635 --> 02:33:35.175
can save users money simply by making smaller transactions.
1867
02:33:36.490 --> 02:33:38.110
There are so many advancements,
1868
02:33:38.490 --> 02:33:42.110
at least that I know that exist in the Bitcoin Core Wallet and can be used
1869
02:33:42.490 --> 02:33:42.990
to
1870
02:33:43.495 --> 02:33:44.555
save users money.
1871
02:33:45.495 --> 02:33:49.435
And in the enterprise world as well to batch payments
1872
02:33:49.735 --> 02:33:55.279
or fee bump in a more smart way, shout out to CardCoins for doing batched
1873
02:33:56.060 --> 02:33:56.720
RBF payments,
1874
02:33:58.699 --> 02:34:04.605
that save users money. So, like, I don't think block space or, like, demand for block space necessarily
1875
02:34:05.545 --> 02:34:09.965
shows you how many people are transacting with Bitcoin. That that's my main point.
1876
02:34:10.601 --> 02:34:17.815
Because I think when people see empty blocks or when when they see, like, an empty mempool, they're like, oh, nobody's using Bitcoin, and that's just not true.
1877
02:34:18.136 --> 02:34:21.756
1878
02:34:22.136 --> 02:34:24.395
again, if when blockspace is cheap,
1879
02:34:24.990 --> 02:34:27.890
people will use it. When it's very, very expensive,
1880
02:34:28.270 --> 02:34:35.315
people feel pain and they try to solve it in different ways, right, and we talked about that. You can That's time. A ton of optimizations.
1881
02:34:36.095 --> 02:34:38.275
And, I mean, we've seen massive improvements,
1882
02:34:39.055 --> 02:34:46.801
in in optimizations in the mempool over the past 4 years from I mean, it was originally interesting because it it was so hilariously bad.
1883
02:34:47.360 --> 02:34:54.945
1884
02:34:55.645 --> 02:34:57.985
And then after that huge spike in 2017,
1885
02:34:58.490 --> 02:35:04.590
1886
02:35:05.050 --> 02:35:18.000
to optimize their use of Bitcoin's blockchain space. Right? Once those fees spike up, yeah, let's let's prioritize that Segwit implementation, right, or let's move our low low value transactions to layer twos.
1887
02:35:18.620 --> 02:35:25.825
1888
02:35:26.285 --> 02:35:31.345
which is Bitcoin is growing and there is more of everything. Right? But there are downwards pressures. There are optimizations.
1889
02:35:32.080 --> 02:35:42.025
There's other solutions, you know. Someone, might say, hey. But you know what? We can actually solve this particular thing in a centralized way, and it moves off of there. There's a lot of different ways of of achieving,
1890
02:35:42.405 --> 02:35:46.505
you know, the same goal. Right? And so when when the price is high, that creates,
1891
02:35:47.045 --> 02:35:52.960
an incentive for for someone to rethink of it. I mean, I've always expected there to
1892
02:35:53.340 --> 02:36:03.505
be a Bitcoin payment service provider at some point, that just like takes Bitcoin here, completely centralized. It takes some Bitcoin here, sends the Bitcoin there and just does it all on chain, but it still hasn't happened.
1893
02:36:04.205 --> 02:36:04.944
We've been
1894
02:36:05.490 --> 02:36:07.590
the so I mean, these things,
1895
02:36:08.290 --> 02:36:10.150
will probably start happening,
1896
02:36:10.690 --> 02:36:11.010
when
1897
02:36:12.210 --> 02:36:14.790
especially during this, because the mempool moves,
1898
02:36:15.105 --> 02:36:31.705
it doesn't grow, nice and steady. It moves in in extreme spikes. Yeah. Whenever the market's pumping hard, everyone wants to move their money to exchange and withdraw. And there's a lot of stuff that's algorithmic here in terms of fee estimation and a bunch of other things. So oftentimes, it's not even a human. Where, like,
1899
02:36:32.085 --> 02:37:06.710
there's bots that they will send from one exchange to another exchange. And I think the coffee transactions are getting pushed out, priced out of Bitcoin, right? And and that's, like, the future of Bitcoin is that we migrate to this multilayer ecosystem where sometimes you use Lightning or Liquid or some custodial service. Right? Well, it might. I mean, you'd be surprised with how many really small transactions are still happening on chain. I mean, I agree. I mean, I'm a mega Lightning fan. I want to move it to Lightning, but a lot of people use on chip Bitcoin for really small transactions. So they'll even at 1 cent per byte, they pay like a pretty high percent
1900
02:37:07.485 --> 02:37:13.025
1901
02:37:14.045 --> 02:37:16.305
but thanks for sharing your, very passionate
1902
02:37:16.690 --> 02:37:19.990
opinions on the, state of the mempool and the future of the mempool.
1903
02:37:21.490 --> 02:37:25.110
1904
02:37:56.530 --> 02:37:57.030
1905
02:37:57.490 --> 02:37:57.990
hello.
1906
02:37:59.090 --> 02:38:00.470
We're here to talk about
1907
02:38:01.785 --> 02:38:10.365
why lightning is not private. It's, it's it's, you know, as the b cashers would say, doomed to failure. It's never gonna work, all all that.
1908
02:38:11.490 --> 02:38:12.391
So welcome,
1909
02:38:13.250 --> 02:38:17.270
Evan Kaludis from, Zeus Lightning, Anthony Ronning from Infurvius,
1910
02:38:17.730 --> 02:38:19.190
Nifty Nye from Blockstream.
1911
02:38:20.226 --> 02:38:20.726
And,
1912
02:38:21.266 --> 02:38:21.766
yeah.
1913
02:38:22.945 --> 02:38:24.005
In all seriousness,
1914
02:38:24.785 --> 02:38:26.966
lightning is kind of pitched as
1915
02:38:27.730 --> 02:38:37.351
a magic privacy solution. You you hop on Lightning, you you spend your money over Lightning, and there's nothing to worry about. Like, no information leaking. It fixed
1916
02:38:38.114 --> 02:38:39.734
the, privacy issue.
1917
02:38:40.755 --> 02:38:43.255
And the technical reality of that is
1918
02:38:43.715 --> 02:38:44.215
not
1919
02:38:45.040 --> 02:38:45.540
quite.
1920
02:38:47.680 --> 02:38:48.899
So I guess to start,
1921
02:38:49.760 --> 02:38:53.620
you know, the the whole issue between sending and receiving there.
1922
02:38:55.024 --> 02:39:07.090
I guess wild card, anybody wanna talk about the issues in terms of when you receive money, all the information that just leaks out into the world that a lot of users might not be aware of?
1923
02:39:08.270 --> 02:39:10.085
1924
02:39:10.565 --> 02:39:33.814
senders have amazing privacy on on lightning, from a general level. You know, there's some, you know, trade offs there, and you can get into the weeds on that. But when you're sending payments, you can, you have, like, onion routing messages going across the network. So, you know, you don't really know where it actually came from. You don't even know if the previous hop that a lightning, lightning payment is going through is actually who it is. But like you said, like, receivers on the other hand,
1925
02:39:34.195 --> 02:39:36.135
it's it's a little bit of a different story.
1926
02:39:37.210 --> 02:39:48.025
You have to, like, give information out to another person in order to get paid to actually receive money. So, some of that information that's leaked is like, you know, alias names, IP addresses.
1927
02:39:48.565 --> 02:39:52.825
If you have any unannounced channels, you know, you you may leak those as well,
1928
02:39:54.634 --> 02:39:55.881
in order to get paid down those channels.
1929
02:39:56.341 --> 02:39:58.120
So there's a there's a lot of,
1930
02:39:58.660 --> 02:40:04.386
you know, areas where receivers need to be a little bit careful, especially, like, if someone is just, like, posting
1931
02:40:04.926 --> 02:40:11.825
invoices onto, like, Twitter or something, and it's just, like, completely, you know, doxing all that information to the open world.
1932
02:40:12.511 --> 02:40:27.545
So, like, you know, I think I think there is some, like, you know, a lot of privacy gains that we can get on lightning. I think it comes down to the users not shooting themselves in the foot and having a little bit more education on, like, what to do and what not to do, when it comes especially when it comes to receiving on Lightning.
1933
02:40:28.141 --> 02:40:30.160
1934
02:40:30.700 --> 02:40:39.726
application developers, they need to give users the tools to be able to not shoot themselves in the foot, but we also need to see some changes at a protocol level, I believe,
1935
02:40:40.105 --> 02:40:41.886
to really get to where we wanna be.
1936
02:40:42.586 --> 02:40:55.225
1937
02:40:56.005 --> 02:40:57.545
a step change function
1938
02:40:57.925 --> 02:41:02.750
in how private your actual transactions are. So, like, just when you're making transactions,
1939
02:41:03.130 --> 02:41:05.230
if you're gonna make a transaction with Bitcoin,
1940
02:41:05.851 --> 02:41:14.154
like, kinda I think I think it's I think it's true that it's more private if you're doing it on Lightning. So if you had to pick on chain versus Lightning and you're concerned about privacy,
1941
02:41:14.455 --> 02:41:16.875
that's definitely the right choice. Right? Oh, yeah. Definitely.
1942
02:41:17.335 --> 02:41:19.930
1943
02:41:20.470 --> 02:41:23.450
1944
02:41:23.990 --> 02:41:25.290
it's not quite the
1945
02:41:25.945 --> 02:41:27.245
the perfect solution,
1946
02:41:27.625 --> 02:41:30.345
you know, that it kind of gets generalized about. But,
1947
02:41:31.145 --> 02:41:33.005
you know, speaking of solutions
1948
02:41:33.671 --> 02:41:35.131
to receiver side privacy,
1949
02:41:35.990 --> 02:41:38.650
you know, there there's a number of protocol proposals,
1950
02:41:39.671 --> 02:41:41.931
rendezvous routing, route blinding,
1951
02:41:42.355 --> 02:41:44.216
trampoline routing that could
1952
02:41:44.676 --> 02:41:48.136
potentially level that to the point where receivers are
1953
02:41:48.516 --> 02:41:52.240
at least more private than they are now, if not on par with senders.
1954
02:41:53.340 --> 02:41:57.440
You guys have any favorites there in terms of which one to go with?
1955
02:42:00.034 --> 02:42:00.435
1956
02:42:00.835 --> 02:42:17.915
I I you know, from from the protocol level, I haven't read, a lot of the specs. But I think, like, in general, just speaking at a high level, the ability to give out, like, you know, receivers need to give out some information to get paid. Ideally, that information, like, doesn't reveal anything about them. So it could have, like,
1957
02:42:18.455 --> 02:42:26.610
you know, a lot of, you know, maybe fake hops. Maybe it's like maybe it's like with rendezvous or or or route lining. And it's like, you know, get your payment to this location,
1958
02:42:27.150 --> 02:42:45.851
and then that location will will, you know, get the payment to me. Kind of the gist of that. So, you know, there's, it it kinda like cuts that separation where like, okay, everything previously we don't know where it came from, and then everything after we don't know where, you know, we don't know where it's going either. So I think there's, like, a lot of protocol advancements that that could happen,
1959
02:42:46.790 --> 02:43:13.185
1960
02:43:13.725 --> 02:43:19.439
how much you're paying. Usually, there's a description of what you're buying, etcetera. So invoices themselves
1961
02:43:19.819 --> 02:43:25.935
leak basically all of your transaction data. Like, that's the whole payment. That's the whole transaction is in the invoice. Right? So,
1962
02:43:27.034 --> 02:43:36.790
there's some questions about, like, okay. Maybe we can if is there a way we can produce an invoice that doesn't tell you exactly which node on the network you're paying,
1963
02:43:37.250 --> 02:43:38.150
but can
1964
02:43:38.755 --> 02:44:02.065
pay to some intermediate node, and then that intermediate node will be able to figure out how to get to the person who actually wants to receive the payment. So So this is almost like I guess we call those, like, proxies in, like, normal networking stuff. Right? Yeah. And and it's interesting because a lot of the proposals, it's not really just, you know, making the data go away. It's like deferring to which parties are privy to who the receiver is.
1965
02:44:02.580 --> 02:44:10.440
1966
02:44:12.405 --> 02:44:16.425
1967
02:44:16.965 --> 02:44:21.400
we're we're discussing, like, rendezvous routing, route blinding, trampoline routing.
1968
02:44:22.180 --> 02:44:22.840
It's really
1969
02:44:23.220 --> 02:44:29.955
they're all kind of in a way, like, doing the same thing just like little subtle differences.
1970
02:44:31.854 --> 02:44:34.835
Like, Gavin or Lisa, I mean, do you guys,
1971
02:44:36.015 --> 02:44:49.984
you know, have have any kind of thoughts in terms of the the privacy trade offs between the 3 of them? Like, the the benefits you can get out of, rendezvous versus route blinding versus trampoline and potential negative sides to that,
1972
02:44:50.604 --> 02:44:52.305
depending on which one gets implemented?
1973
02:44:52.925 --> 02:45:06.235
1974
02:45:07.335 --> 02:45:30.675
In terms of, like, what's being worked on currently, I know that the route widening thing is currently implemented in core lightning, which is a project I work on, and there's an a few other teams that are working on route binding currently. So in terms of, like, out of these three things, which is the most likely to get over the line first in terms of, like, being accessible to the most people who are running lightning, it'll definitely be route binding.
1975
02:45:31.520 --> 02:45:32.181
I don't
1976
02:45:32.641 --> 02:45:35.540
I was just talking to one of the maintainers
1977
02:45:35.920 --> 02:45:39.940
of the async project. They're working on their route binding stuff.
1978
02:45:41.614 --> 02:45:48.835
I can't remember. I think trampoline routing is the one that we're supposed to be doing this year also, just for that and stuff. So maybe that'll be there soon.
1979
02:45:49.530 --> 02:45:52.891
But these things are, like, actively proposed. Like, they're currently in progress, and,
1980
02:45:53.530 --> 02:45:55.391
I've been tasked with asking if you
1981
02:45:55.770 --> 02:45:59.845
if you're a developer and you wanna, like, get involved in improving some of the payment routing
1982
02:46:00.305 --> 02:46:01.685
privacy on Lightning,
1983
02:46:02.064 --> 02:46:06.564
we could definitely use some help reviewing the route blinding PR, which I think is number 765
1984
02:46:07.290 --> 02:46:08.190
on the bolts,
1985
02:46:09.690 --> 02:46:10.190
repository.
1986
02:46:11.370 --> 02:46:11.850
Cool.
1987
02:46:12.970 --> 02:46:13.470
1988
02:46:15.404 --> 02:46:18.705
1989
02:46:19.645 --> 02:46:24.160
1990
02:46:24.480 --> 02:46:24.980
But,
1991
02:46:25.680 --> 02:46:27.620
really, I I don't think we're gonna
1992
02:46:28.480 --> 02:46:35.976
really get, like, a full understanding of what all the implications and and limits are really until we're testing it out in the wild. So I'm very excited to
1993
02:46:36.860 --> 02:46:45.360
see that tooling out in, you know, various node projects out in the wild and people just trying it and and figuring out where they get caught up and whatnot. So,
1994
02:46:46.015 --> 02:46:53.615
you know, wherever I can, either 3 of these, you know, methods, I would love to get them into so people can try them on the go and,
1995
02:46:55.400 --> 02:46:59.340
you know, just give it a give it a shot. And, you know, since these
1996
02:46:59.880 --> 02:47:06.245
all these methods are really just about, like, changing up how the routing goes goes, like, instead of just having the the sender
1997
02:47:06.625 --> 02:47:11.365
figuring out the path to it. It's gonna be interesting to see if people also have,
1998
02:47:12.460 --> 02:47:23.805
any pains with unable to to being able to find, like, a path to make their payments. So that's the trade off with a lot of these proposals. It's like you're gonna be able to, get selective privacy in a lot of ways,
1999
02:47:24.585 --> 02:47:26.364
but it may make for a worse
2000
02:47:26.904 --> 02:47:27.404
UX
2001
02:47:27.950 --> 02:47:30.210
in terms of actually completing that payment.
2002
02:47:31.790 --> 02:47:32.290
2003
02:47:32.750 --> 02:47:40.436
2004
02:47:40.976 --> 02:47:49.520
I think the Electrum lightning implementation was, like, kind of the first to implement trampoline routing, which was kinda cool. I don't know anyone using that Python,
2005
02:47:50.140 --> 02:47:50.720
you know,
2006
02:47:51.100 --> 02:47:53.040
node. I don't know if you should.
2007
02:47:53.580 --> 02:48:06.080
But it's, like, it's, like, you know, awesome to be able to, like, innovate and, like, all of us like independently in all the different node implementations. Kind of like experimenting with different things and and contributing or hopefully contributing back to the specification process.
2008
02:48:06.561 --> 02:48:18.145
So we can all kind of all benefit from it. So, and I think I think async has also like a boom and a trampoline route in, themselves. So, you know, I think there's, like, combinations of things that we could all use to kind of,
2009
02:48:18.686 --> 02:48:30.580
you know, may you know, maybe it's possible to use trampoline routing with route planning in a way or, you know, think you know, vice versa. So, I, you know, I would I would really just like to have, like, the most amount of, like, privacy options
2010
02:48:31.005 --> 02:48:36.625
for users on lightning. But, like, again, I I do agree with everyone here that, you know, probably route binding,
2011
02:48:37.245 --> 02:48:45.370
you know, I I haven't looked at it, deeply enough to, like, see any, like, connotations with it. So, like, I think in general Mhmm. I think, you know, it's pretty well,
2012
02:48:45.850 --> 02:48:49.625
supported as as far as, like, we should probably do route blinding.
2013
02:48:50.404 --> 02:48:55.704
2014
02:48:56.380 --> 02:48:57.760
more experimentation. Yeah.
2015
02:48:58.220 --> 02:49:04.399
2016
02:49:06.575 --> 02:49:07.875
just trampoline routing.
2017
02:49:10.815 --> 02:49:16.221
I kind of have an issue at a high level with just like the idea of outsourcing
2018
02:49:17.080 --> 02:49:19.900
the route construction to a third party because,
2019
02:49:20.545 --> 02:49:35.979
you know, in theory, you you can just kind of nest different trampoline nodes together and then have, like, the first one, you know, just get the route from you and then go on to the next one and the next one. And like any onion routed system, you you don't know,
2020
02:49:36.365 --> 02:49:41.186
like, if this is the final destination I'm routing to or another trampoline node.
2021
02:49:41.725 --> 02:49:42.865
But in practice,
2022
02:49:44.180 --> 02:49:51.479
you know, a a node doing trampoline routing and route selection is probably gonna be very publicly visible and known.
2023
02:49:51.825 --> 02:50:01.720
Oh, yeah. And you still have information like the, the time step for the, refund path in an HTLC to look at with a maximum length that can have.
2024
02:50:02.600 --> 02:50:04.779
And, like, all the the little metadata
2025
02:50:05.399 --> 02:50:08.220
that kind of piles up where it's like, well, in theory,
2026
02:50:08.735 --> 02:50:16.436
like, you can just link the different trampoline nodes together and they don't know, like, what the final destination is. But in practice,
2027
02:50:17.341 --> 02:50:22.721
you know, there there's probably gonna be some things you can suss out, like the length of the route. Obviously,
2028
02:50:23.420 --> 02:50:24.061
you know, if,
2029
02:50:24.795 --> 02:50:30.895
let's say Blockstream had a trampoline node and I go there first, but then route to async,
2030
02:50:31.274 --> 02:50:37.270
well, like, Blockstream's node is gonna see, oh, that's async's node. Like, that's just another trampoline hop.
2031
02:50:37.650 --> 02:50:38.150
So,
2032
02:50:39.115 --> 02:50:40.495
I mean, is is maybe
2033
02:50:41.915 --> 02:50:45.775
pitching that as a privacy solution kind of a a misnomer?
2034
02:50:46.290 --> 02:50:57.925
2035
02:50:58.945 --> 02:51:03.525
So, basically, the idea of the trampoline route is that you can,
2036
02:51:03.870 --> 02:51:05.970
if if you're using a trampoline route,
2037
02:51:06.430 --> 02:51:12.130
you don't have to understand how to get to every node on the network. So it saves you a lot of data as a node
2038
02:51:12.726 --> 02:51:16.345
because you can offload the path riding, the path finding,
2039
02:51:16.726 --> 02:51:19.306
like, responsibility to someone else in the network.
2040
02:51:19.770 --> 02:51:30.665
I think it's for a fee. I think you get paid if you do, like I think there's, like, some, like, little, like, earn some money by doing a trampoline route thing in there. I feel like an extra fee for constructing route for someone, a partial route, I should say.
2041
02:51:31.226 --> 02:51:36.365
So then the idea is that if you have, like, a mobile phone and a wallet and you wanted to send a payment from there,
2042
02:51:36.851 --> 02:51:43.910
you only need to know how to construct a route to get to a trampoline node and then you can get your payment sent from there. Like, then the trampoline
2043
02:51:45.345 --> 02:51:48.085
node will figure out how to send it to anyone else on the network.
2044
02:51:49.185 --> 02:51:49.685
Yeah.
2045
02:51:50.225 --> 02:52:07.245
Yeah. I know. So, like, I think, like, all of these things, like, these are, like, routing level stuff. Right? And so I think it's kinda interesting to talk, like, okay. What exactly what sort of data are you leaking, like, when you're routing a payment? Right? So we talked a little bit earlier, like, when you have an invoice, invoice is basically, like, the part of
2046
02:52:07.705 --> 02:52:08.525
figuring out
2047
02:52:09.930 --> 02:52:19.630
who to pay and how much to pay them and for what. Right? So it's, like, invoice level. And then there's, like, okay. Once you have the invoice, you use the invoice to, like, figure out the route you're gonna take to your payment.
2048
02:52:20.235 --> 02:52:30.290
And then once you've, like, figured out the whole route finding thing. Right? Maybe you're using trampoline and someone else is finding out the route for you. What data is in a route, you know, this route finding thing?
2049
02:52:30.830 --> 02:52:33.490
It's gonna be the amount of money that you're sending.
2050
02:52:34.436 --> 02:52:36.275
It's gonna oh, great. Thank you.
2051
02:52:36.836 --> 02:52:42.240
It's gonna be the amount of money that you're sending. Right? So you still wanna know, like, how much money you're sending and
2052
02:52:49.280 --> 02:52:50.905
hello? Okay. I think it's still on.
2053
02:52:51.945 --> 02:53:02.100
Great. So yeah. So there's kind of like that. Like, the the level of information that you got kind of is different sort of depending on where in the payment process, etcetera, that you're you bind yourselves. Right?
2054
02:53:02.739 --> 02:53:09.075
One thing that's kinda interesting is talking to Matt Goralu who works on Spiral, they do LDK stuff right before this is,
2055
02:53:09.875 --> 02:53:21.079
one of the current kind of issues with these, like, so payments. So when you send a payment across the network, usually, they're wrapped up in things called onions. Right? And so you do onion routing, which means that when you get a payment,
2056
02:53:21.779 --> 02:53:37.745
you can see who sent it to you and you can see where it's headed. But you as the person with the in the middle of this route have no idea where it came from before it got to you and where it's going after the next hop. Right? So we already have that level of, like, privacy and lightning that already exists. Yep.
2057
02:53:38.120 --> 02:53:39.580
We're talking about, like,
2058
02:53:40.360 --> 02:53:54.825
sort of, like, different levels of, like, ways you can make those route, those onions, and how do you make sure that maybe you don't know exactly who the last person is when you're constructing the onion. That's what blinded past due. That's what trampoline does in some sense, I think.
2059
02:53:55.950 --> 02:54:01.250
Yeah. Anyway, so, like, one of the things with, like, this this routing data then is, like, you wanna be able to hide
2060
02:54:01.551 --> 02:54:32.520
how far you've gone from the start point and how far you are from the finish. But there's some, like, there's kind of a tension here between that and, like, this other parameter that we send in these packets called the CTL v lock. Right? Lock time. So that you can kinda use I think, like, you can do I think, I think there are researchers that have done basically analysis on, like, the CLTV lock that kinda tells you how far you are in that path. So, like, if someone knows how many hops away you are, they can kinda look back and maybe figure out where you came from and where it's going, etcetera. So,
2061
02:54:33.140 --> 02:54:38.120
that's kind of like, okay, how do you that's like that those kinds of questions are like, okay, how do you
2062
02:54:38.705 --> 02:54:43.364
deanonymize or, like, figure out where a payment's going given that you didn't see the invoice, etcetera?
2063
02:54:43.904 --> 02:54:49.430
If you have the invoice, like I said, you usually know exactly where it's going. We're trying to fix this with the Bolt 12 stuff.
2064
02:54:50.210 --> 02:54:54.870
Bolt 12 use blinded path, so you'll be able to, as a receiver,
2065
02:54:55.235 --> 02:55:13.630
not tell people that you're the node being paid. You can instead provide a little bit of a route of how to get to you, and so you send that with the request to be paid. Person who gets the request to be paid will pay to the beginning of this path that you've constructed, so they don't see where it goes after it gets to that, like, start point, basically.
2066
02:55:14.455 --> 02:55:19.515
2067
02:55:21.015 --> 02:55:37.285
with with analyzing the c you know, the the time lock. You can even, like, analyze the timing too. So, like, if if, like, a payment normally takes, like, a certain amount, you know, per hop, and you can even, like, analyze how long each hops have certain network latency. You could even, like, try to, you know,
2068
02:55:37.750 --> 02:55:40.330
like, attempt to, like, figure out where in the network,
2069
02:55:40.870 --> 02:55:43.050
a node may have been sending from.
2070
02:55:43.430 --> 02:55:49.564
There's been some research on that level and then but on the flip side, there's been, a lot of research or at least like one paper
2071
02:55:49.865 --> 02:55:51.564
into how we can actually,
2072
02:55:52.904 --> 02:56:12.875
construct routes at the sender level to kind of take paths that are not the traditional path. That way, you know, if I'm always going through a couple of different nodes, you know, maybe maybe they can analyze that. Oh, well, it's probably coming from this location over here. Mhmm. They may not know exactly who's making the payment, but they can kinda make some educated guesses.
2073
02:56:13.230 --> 02:56:27.314
But what's cool is that you can actually, like, construct the you know, it's you construct the payment yourself and maybe that guide kind of goes along the lines of like, you know, maybe we shouldn't just like hand it off trampolines to construct the routes ourselves. But if individuals are able to do these, like, nontraditional,
2074
02:56:28.015 --> 02:56:36.750
you know, routing algorithms, pathing algorithms, then then we can actually, like, try to attempt to get, you know, better privacy and, you know, better heuristics there.
2075
02:56:37.689 --> 02:56:40.189
2076
02:56:40.585 --> 02:56:49.245
choose a more random path than just, like, the cheapest or most direct route. I think we use, like, a fee budget. So we give you a budget to try and get to there. And so
2077
02:56:49.580 --> 02:56:55.520
that way, trying to, like, kind of use not necessarily the most obvious way to make your payment happen,
2078
02:56:56.060 --> 02:56:56.880
which is cool.
2079
02:56:58.085 --> 02:57:00.425
2080
02:57:01.365 --> 02:57:11.370
a a massive issue that I think is is really, are are we gonna be able to solve that one? Because, like, what that really boils down to is is, like, timing analysis.
2081
02:57:11.935 --> 02:57:14.675
I mean, if you zoom out and say
2082
02:57:15.135 --> 02:57:19.875
the NSA gets really interested in what's happening on the lightning network, well,
2083
02:57:20.480 --> 02:57:28.100
they can just watch everybody's nodes and, oh, that that string of packets, that's exactly the size that proposing an HTLC
2084
02:57:28.400 --> 02:57:28.900
messages.
2085
02:57:29.285 --> 02:57:32.025
Oh, and then and then something zipped back the other way?
2086
02:57:32.405 --> 02:57:35.545
Oh, okay. Did, you know, did that confirm or refund?
2087
02:57:36.165 --> 02:57:49.145
And just watch the the packets and go, well, the whole protocol is spec'd out. Like, you you know exactly, like, what the size of adding an HTLC is, removing it, like a pre image flowing back through the route
2088
02:57:49.685 --> 02:57:50.585
and okay,
2089
02:57:52.245 --> 02:57:53.305
like, oopsies.
2090
02:57:54.950 --> 02:58:01.851
2091
02:58:02.564 --> 02:58:04.665
ascertain, like, some serious information.
2092
02:58:05.045 --> 02:58:05.545
And,
2093
02:58:06.245 --> 02:58:07.705
you know, there's been some
2094
02:58:08.165 --> 02:58:14.300
ideas as to how to throw some extra noise into the network to sort of obfuscate what's actually happening.
2095
02:58:15.560 --> 02:58:19.615
But, you know, that all comes with additional cost. Right? You know, it's already tricky
2096
02:58:20.155 --> 02:58:24.655
to run a node, processing a lot of packets, you're moving a lot of Sash around too especially.
2097
02:58:25.355 --> 02:58:29.240
And, we need to acknowledge that, you know, with these ideas that
2098
02:58:29.860 --> 02:58:30.760
are being proposed,
2099
02:58:31.620 --> 02:58:33.479
it's gonna increase the cost of
2100
02:58:34.020 --> 02:58:34.760
node operation.
2101
02:58:37.025 --> 02:58:41.105
2102
02:58:42.145 --> 02:58:43.686
I I hear you have a little
2103
02:58:44.145 --> 02:58:44.645
project
2104
02:58:44.950 --> 02:58:47.450
going on, in regards to testing
2105
02:58:48.230 --> 02:58:48.390
the,
2106
02:58:49.350 --> 02:58:52.090
the privacy and effect of, unannounced channels.
2107
02:58:52.655 --> 02:58:53.155
2108
02:58:53.535 --> 02:58:58.595
So about a year ago, I wrote a paper on Lightning privacy. And as I was, you know, just really just documenting,
2109
02:58:59.135 --> 02:59:02.520
when I knew about it, I learned, I learned quite a lot doing that. And,
2110
02:59:03.140 --> 02:59:05.080
you know, one of the things is like, we call,
2111
02:59:05.620 --> 02:59:06.760
private channels private.
2112
02:59:07.404 --> 02:59:22.050
But they're they're really they're really not. They're more along the lines of unannounced channels. So whenever I'm a node and I have, you know, let's say I have all private channels, if I wanna receive down them, I create an invoice and I give that invoice to other people to to pay me.
2113
02:59:22.465 --> 02:59:30.085
I basically have to, like, docs my, you know, unannounced channel. So with that unannounced channel, they can see the UTXO,
2114
02:59:30.890 --> 02:59:36.590
the unspent transaction output that went into that channel. And then from there, you kind of have the leakage
2115
02:59:37.050 --> 02:59:38.329
of of all the things from,
2116
02:59:38.805 --> 02:59:46.780
that can be leaked on Bitcoin privacy like on chain. Some of that follows and kind of flows into the value network as as an inherent,
2117
02:59:47.160 --> 02:59:49.340
you know, problem for privacy as well. So,
2118
02:59:50.040 --> 02:59:58.125
one of the things you can actually do is, you know, probing on the lightning network. Because actually I don't I I consider it kind of a big problem in the space.
2119
02:59:58.744 --> 03:00:07.180
I don't like that probing happens. I, you know, I don't like that it kind of is, you know, allows that, but probing is basically sending a whole bunch of fake information
2120
03:00:07.480 --> 03:00:10.940
and finding information that is not, like, traditionally public.
2121
03:00:11.386 --> 03:00:12.525
So it could be balances.
2122
03:00:13.386 --> 03:00:19.245
In my case, what I'm trying to do right now and and I did a hackathon with Paul Miller in Austin a few weeks ago,
2123
03:00:19.921 --> 03:00:22.500
where we're kind of proving this out with the LDK toolkit.
2124
03:00:22.960 --> 03:00:24.421
You can actually probe,
2125
03:00:24.960 --> 03:00:30.915
4 private channels to see if they exist between 2 nodes. If me and me and Evan here have a private channel,
2126
03:00:31.455 --> 03:00:33.556
2127
03:00:35.136 --> 03:00:41.979
2128
03:00:42.439 --> 03:00:48.375
it's not to say it's, like, for a huge amount. It's all on his side. He he opened up the channel. I'm doxxing you, bro. This is so bad.
2129
03:00:48.676 --> 03:00:54.615
You you can actually you know, if I'm connected to the general lightning graph, you can actually try to probe
2130
03:00:55.030 --> 03:01:11.085
through through my channel and, like, try to attempt to guess the UTXO that is between us. And if you're able to guess the UTXO between us, there's a different error message that it gets, like, sent backwards. So you kind of get into a situation where, like, once it proves it out,
2131
03:01:11.979 --> 03:01:24.524
you know, once you actually probe all the way through, like, you create this fake payment in a way where, like, Evan basically has to come back. His node will come back and say, give it an error message. Like, I can't I can't redeem this fake payment that you made.
2132
03:01:24.825 --> 03:01:50.630
So so but the fact that he is the one that gave that error message, like, proves out that there is this unannounced channel between us. And and from there, you know the amount, you know, the UTXO, the addresses it's associated with, and, like, all of that is, like, possible today. And and me and me and Paul finally, like, took the time to actually, like, create a proof of concept of doing that, and I'm hoping to, run that over the next couple months and, you know, release,
2133
03:01:51.250 --> 03:02:07.569
release what my findings there. Because it's like, you know, we can, you know, we we love lightning. Right? I think that's I think, you know, a lot of us here really love, you know, some of this stuff and it's like, if this is possible, I want it to be like revealed. Like if if if if I can do this,
2134
03:02:08.029 --> 03:02:10.529
you know, multibillion dollar firms can do this,
2135
03:02:11.229 --> 03:02:19.095
you know, triple letter agencies can do this. So I would rather us do this and find this information out and try to make the lighting network better.
2136
03:02:19.875 --> 03:02:22.055
2137
03:02:22.355 --> 03:02:23.815
in this security theater.
2138
03:02:27.920 --> 03:02:28.960
But yeah. I mean
2139
03:02:30.720 --> 03:02:37.295
yeah. If if it breaks, let's break it now while things can still be fixed instead of 5 years from now when
2140
03:02:38.155 --> 03:02:43.180
who knows how many countries are are trying to plug into lightning and use that as payment rails.
2141
03:02:44.140 --> 03:02:45.040
Yeah. That But,
2142
03:02:46.620 --> 03:02:49.840
kind of a related, but little little hard shift here.
2143
03:02:50.895 --> 03:02:55.455
Who wants to talk about the, gossip protocol and routing tables and,
2144
03:02:56.815 --> 03:02:58.035
figure out why
2145
03:02:58.780 --> 03:03:00.880
we still explicitly docks
2146
03:03:01.340 --> 03:03:02.080
the UTXO
2147
03:03:02.620 --> 03:03:10.155
associated with with a public channel so that the whole world can just follow where those coins go after channels close?
2148
03:03:11.415 --> 03:03:16.710
2149
03:03:17.170 --> 03:03:21.350
is, like, payment level privacy. Like, I wanna make a transaction on Lightning,
2150
03:03:21.835 --> 03:03:28.335
and so we've been talking about some of the, like, pros and cons in sending invoices to people and then sending payments, etcetera.
2151
03:03:28.770 --> 03:03:32.851
This is kind of so this level of privacy that we're talking about is, like, gossip
2152
03:03:34.051 --> 03:03:46.130
the gossip network and UTXO level is more like what kind of so the information that you are leaking or finding out the privacy here is which UTXOs or, like, outputs in Bitcoin
2153
03:03:46.590 --> 03:03:50.529
belong to which nodes, right? So it's tying on chain
2154
03:03:51.149 --> 03:03:52.449
outputs and balances,
2155
03:03:53.875 --> 03:04:02.136
to, like so basically the account balance of any one Lightning node, how we use that to figure out, what kind of implications does that have.
2156
03:04:02.590 --> 03:04:07.010
So I think it's kind of interesting actually that, like, this information is, like, completely separated
2157
03:04:07.630 --> 03:04:10.850
to a large extent from your transaction data, right? So,
2158
03:04:11.226 --> 03:04:13.085
that's a big contrast from transacting
2159
03:04:13.865 --> 03:04:14.525
on chain.
2160
03:04:15.865 --> 03:04:21.520
When you make payments using on chain Bitcoin, that becomes public record for everyone whereas when you're transacting
2161
03:04:22.061 --> 03:04:22.721
on Lightning,
2162
03:04:23.341 --> 03:04:45.740
it's ephemeral. People kind of have to be watching for your stuff to go through or, like, constantly monitoring balances, etcetera, to even see the payments moving, etcetera. Anyways, this is like gossip stuff. The way that Lightning works is for these are for announced or public channels. Right? Unannounced channels kind of escape this. When you make a Lightning channel, you're creating an on chain transaction
2163
03:04:46.120 --> 03:04:48.220
that creates a UTXO output.
2164
03:04:48.645 --> 03:04:52.266
That UTXO output contains the balance of the channel.
2165
03:04:52.645 --> 03:04:55.705
What so there's 2 parties in a Lightning channel.
2166
03:04:57.210 --> 03:05:01.710
Who owns what amount of that total balance is, like, kind of an open question.
2167
03:05:02.570 --> 03:05:06.726
That's what you might use the probing stuff that we were talking about earlier to figure out.
2168
03:05:07.585 --> 03:05:09.205
But the on chain transaction,
2169
03:05:09.825 --> 03:05:10.726
like, typically,
2170
03:05:11.510 --> 03:05:18.649
if you're using the version 1 of, like, channel opens, usually, that balance is all on one side to start with, generically speaking.
2171
03:05:19.305 --> 03:05:21.005
Anyways okay. So you have these UTXOs.
2172
03:05:21.625 --> 03:05:43.024
It would be all great and good if you didn't have to tell it. You could open a channel, and you don't tell anyone that you made a UTXO on main chain. That's what an unannounced channel is. But it makes it really hard for people to use that channel to do routes for payments if you don't tell them about it. So if you were trying to start up a lightning node and earn money routing payment traffic from your node to someone else's,
2173
03:05:43.325 --> 03:05:51.609
you would need to publicly announce them. The way that you publicly announce them is via something called the gossip network. Where is it gossip network? Do we call it the gossip network?
2174
03:05:52.905 --> 03:05:56.925
2175
03:05:57.465 --> 03:06:12.265
2176
03:06:13.444 --> 03:06:16.585
somewhere. Here's where you can find it on chain.
2177
03:06:17.524 --> 03:06:23.420
Go verify verify it before you use this as a route. So this is what we're talking we're talking about routing table.
2178
03:06:23.721 --> 03:06:34.995
The routing table is basically a list of all of these on chain transactions and the current balance like, the balance the total balance of the channel, right, and who is party to that. Right? So if you have all these balances
2179
03:06:35.610 --> 03:06:45.405
and all these node connections, you can build a connected graph with balances, and then if you want to send a payment, you can look at this graph of data and figure out how to get
2180
03:06:45.886 --> 03:06:48.865
from Tony's node to that guy's node,
2181
03:06:50.205 --> 03:06:50.705
and
2182
03:06:51.165 --> 03:06:52.945
go through the graph that way.
2183
03:06:53.659 --> 03:07:01.279
But the downside to that is that you're telling people where your on chain transactions are and you're associating them with your node ID,
2184
03:07:02.415 --> 03:07:07.476
And this is public data that anyone running a everyone running a Lightning node is hopefully getting,
2185
03:07:08.335 --> 03:07:11.761
so if there's if you're an organization like, Chainalysis
2186
03:07:12.141 --> 03:07:13.200
or some other,
2187
03:07:13.740 --> 03:07:24.145
such organization that has a large body of output data like chain, like on chain data, and they've been working really hard to tie identities to those on chain payments.
2188
03:07:25.090 --> 03:07:34.595
Now they already know kind of what some of your transaction history had been and then you tie it, you put it on a lightning node, and then you use that to open a channel,
2189
03:07:34.895 --> 03:07:48.580
all of a sudden, someone who's, like, managed to figure out your identity in another arena now knows which lightning node is yours and which channel like, what your balances are in the network. So that's like a little kind of, I think, further out. Anyway, so gossip is like,
2190
03:07:49.601 --> 03:07:53.365
really bad for on chain privacy, especially if you're trying to route.
2191
03:07:55.104 --> 03:07:56.564
2192
03:07:57.265 --> 03:08:01.630
you your coworker actually has a new proposal to kind of fix that where
2193
03:08:02.091 --> 03:08:05.630
instead of explicitly doxing the channel UTXO
2194
03:08:05.931 --> 03:08:08.270
and associating it to a specific
2195
03:08:08.730 --> 03:08:09.230
channel,
2196
03:08:09.865 --> 03:08:12.045
a node can just take one UTXO
2197
03:08:12.425 --> 03:08:15.805
and prove, like, I'm a node. I have real Bitcoin,
2198
03:08:16.510 --> 03:08:20.609
and then not have to specifically connect it to their channels
2199
03:08:21.149 --> 03:08:33.105
so that, you know, opening and closing, that that's not leaked. They just have their their one little bit of Bitcoin to prove, like, I actually have money to route, but I'm not gonna tell you the UTXOs to my actual channels.
2200
03:08:33.570 --> 03:08:40.550
2201
03:08:40.865 --> 03:08:48.725
before you get any privacy improvements for Taproot. Right? Because so for those of you who aren't familiar with Taproot, it basically
2202
03:08:49.250 --> 03:08:53.990
makes it such that a lightning channel goes from having a very specific on chain footprint
2203
03:08:54.370 --> 03:08:59.535
to being, like, a single signature and looking like kind of any other, like, output on chain.
2204
03:09:00.715 --> 03:09:08.330
But without changing the way that our gossip and our route table building stuff works, it's going to be very difficult to,
2205
03:09:09.830 --> 03:09:21.205
stop publishing that information anyways. But okay. But, like, so Rusty's proposal though then, like, the other consequence of this is you use gossip. The reason you do the gossip stuff, right, is so that you can build the route to send the payment.
2206
03:09:21.665 --> 03:09:28.080
If we move away from publishing exactly how much money exists between 2 parties,
2207
03:09:28.460 --> 03:09:34.865
how are you supposed to figure out where you can send payments or where there's, like, capacity to send your payment. Yeah. Route route finding becomes
2208
03:09:35.405 --> 03:09:36.225
2209
03:09:37.325 --> 03:09:42.090
2210
03:09:42.570 --> 03:09:47.229
have, like, an amount for the the UTXO you're tying to your node,
2211
03:09:47.689 --> 03:09:56.006
and then some multiple of that is how much you're allowed to advertise in terms of, like, channels. It's like you have, like, 1 Bitcoin locked up. Maybe
2212
03:09:56.705 --> 03:09:58.806
you can advertise, like, 10 Bitcoin
2213
03:09:59.420 --> 03:10:03.040
2214
03:10:04.220 --> 03:10:05.600
I don't I don't want that.
2215
03:10:06.425 --> 03:10:12.845
2216
03:10:13.465 --> 03:10:30.814
why you docks these UTXOs in the first place is literally just to prove, like, you actually have control of Bitcoin so that my wallet isn't spinning the wheel all day trying to route payments through people who don't actually have channels that, you know, there's no way to route a payment through.
2217
03:10:31.274 --> 03:10:38.641
And I I think that this would work. And and, you know, people concerned about denial of service or just, like,
2218
03:10:39.020 --> 03:10:41.200
the the multiple being way overblown.
2219
03:10:42.296 --> 03:10:42.796
Well,
2220
03:10:43.415 --> 03:10:45.436
you know, just set it up as a curve.
2221
03:10:45.895 --> 03:10:51.195
Like maybe you you toss 0.1 bitcoin on there. Okay. Maybe you can only advertise 0.2.
2222
03:10:51.760 --> 03:10:57.859
But if you get up to throwing a whole Bitcoin on there, maybe, you know, 5. Like, just adjust that curve
2223
03:10:58.479 --> 03:11:22.165
2224
03:11:23.105 --> 03:11:36.320
Yeah. It is it is it is a potential solution. I think, like, for, so we're talking about, like, how to do this for, like, public channels, but I think there is, like, one thing to maybe, you know, explain here is that there is some work right now
2225
03:11:36.655 --> 03:11:37.475
on actually
2226
03:11:37.775 --> 03:11:45.740
untying the unannounced channels from the UTXO right now. So there's a short channel ID aliases that is being worked on,
2227
03:11:46.300 --> 03:11:47.920
by a few different teams, I believe,
2228
03:11:48.620 --> 03:11:52.880
where you can actually, like, between me and my channel partner,
2229
03:11:53.955 --> 03:12:01.415
we come up with this scheme where we make a fake alias for our channel ID that is not directly derived from the UTXO
2230
03:12:01.716 --> 03:12:07.080
information. And then if we do that, then, you know, we are the ones that are aware of this. So I share,
2231
03:12:07.460 --> 03:12:33.875
you know, an invoice with with my routing hints in there. It gets it gets to Evan. And then from there, Evan knows this, like, fake, you know, channel ID between us, so he just goes ahead and sends it to me. And then from there, it becomes exponentially harder or, like, almost, you know, impossible to guess that short channel ID. And even if you guessed the fact that, you know, me and Evan had a channel together, you wouldn't necessarily or you wouldn't even be able to get the,
2232
03:12:34.355 --> 03:12:36.535
the UTXO amount or the other information
2233
03:12:36.960 --> 03:12:39.620
associated with UTXO. So I think there's some great,
2234
03:12:40.160 --> 03:12:43.859
you know, privacy improvements for, short channel alias IDs,
2235
03:12:44.240 --> 03:12:45.525
that I'm excited about.
2236
03:12:46.645 --> 03:12:47.945
2237
03:12:48.565 --> 03:12:53.065
like, the public channel still needs to be addressed. Like, you know, one of the,
2238
03:12:53.801 --> 03:12:55.740
I think, key points in that massive,
2239
03:12:56.520 --> 03:13:01.101
privacy article you wrote is if you have a private channel, well,
2240
03:13:01.655 --> 03:13:07.515
you're receiving money through it. So whoever you open that channel with, probably has a bunch of public channels,
2241
03:13:08.055 --> 03:13:09.835
and eventually that's gonna close.
2242
03:13:10.290 --> 03:13:17.750
So if if that private channel closes and they still have a balance on their side and that winds up later in a public channel,
2243
03:13:19.024 --> 03:13:26.645
it's you can very easily deduce, okay, that last transaction was a private channel closing and now your UTXO with that balance
2244
03:13:26.950 --> 03:13:30.650
can be followed on chain. It's okay. This is probably involved in lightning.
2245
03:13:31.351 --> 03:13:42.716
2246
03:13:43.256 --> 03:13:46.395
with other nodes, you even can tell the exact channel
2247
03:13:47.120 --> 03:13:50.500
between the two nodes that there was probably a private channel between.
2248
03:13:51.040 --> 03:14:00.085
So like, yeah, you There's all kinds of on chain analytics and that's one of the things I wanna eventually do with this with this project I'm working on right now where, like, I actually try to analyze
2249
03:14:00.466 --> 03:14:08.390
all the possible UTXO's that may be associated with a node and start at that point instead of just brute forcing through every, Paydoo public,
2250
03:14:08.850 --> 03:14:11.510
script hash on the on the network. So,
2251
03:14:12.095 --> 03:14:22.921
so, yeah, there's a lot of, like, weird on chain analytics that you can kind of link back to a to a specific node, and that's that's one of them. Will Taproot help with that? I think I think Taproot,
2252
03:14:25.061 --> 03:14:26.841
I think there will still be that UTXO
2253
03:14:27.575 --> 03:14:36.635
that could end up in public channels. And then if we if Taproot can't help with the public channel aspect of it, then that's still vulnerability. I think one of the things I'm excited about,
2254
03:14:37.030 --> 03:14:42.630
with Taproot and privacy that I think we can, you know, start, you know, slowly incrementing towards is the ability to,
2255
03:14:43.925 --> 03:14:46.825
you know right now, I can look at all the, you know, pay to,
2256
03:14:48.005 --> 03:14:53.290
public script am I saying that correct? I always screw up the initials there. Pay Pay to what? Pay to
2257
03:14:53.671 --> 03:15:03.426
witness script hash. Yeah. I could look at all the pay to witness script hashes and try to, like, use that as my baseline Mhmm. For brute forcing all these all these unannounced channels.
2258
03:15:03.965 --> 03:15:19.055
But if everyone starts moving towards Taproot and everything looks like a normal spend, even even, like, channel openings and and and, cooperative channel closings, then it makes it a lot harder to it's a it's a bigger set that I have to brute force or anyone has to brute force,
2259
03:15:19.515 --> 03:15:24.495
if we start, like, in general and if the Bitcoin space starts adopting Taproot even more.
2260
03:15:25.080 --> 03:15:29.660
2261
03:15:30.200 --> 03:15:35.375
Obviously, it doesn't solve everything, but, it's a nice foundation to work off of for sure.
2262
03:15:40.170 --> 03:15:42.750
2263
03:15:43.529 --> 03:15:46.670
2264
03:15:47.186 --> 03:15:52.965
that if you are paying an invoice with lightning and you're using a centralized service
2265
03:15:53.426 --> 03:15:55.125
that's not your node,
2266
03:15:55.670 --> 03:16:01.850
you are leaking your payment data. So none of the stuff that we talked about about, like, timing analysis or,
2267
03:16:02.229 --> 03:16:04.890
like, looking at payment traffic flow or probing
2268
03:16:05.350 --> 03:16:08.155
is is gonna matter because you've just told someone
2269
03:16:08.695 --> 03:16:19.100
who you're paying and how much and why. So, like, one thing this is why we're really excited on core lightning about Bold 12 is that it makes it possible to
2270
03:16:19.560 --> 03:16:23.979
hide a lot of that information and still have someone else make a payment on your behalf.
2271
03:16:24.936 --> 03:16:27.595
2272
03:16:31.255 --> 03:16:36.301
When when you're using the Lightning Network yourself, like your own node, your own channels,
2273
03:16:36.681 --> 03:16:57.000
there is that asymmetry where the sender is extremely private. Like, that whole dynamic is very private and receiving is not. And when you're dealing with a custodial wallet, it's almost the inverse. Like, you're leaking everything about who you're paying to that custodian, but when you hand out an invoice, all anybody can tell is they're using this wallet.
2274
03:16:57.460 --> 03:17:04.455
2275
03:17:04.835 --> 03:17:28.154
And if I, like, put in my invoice, like, this is for drugs, and I give that to a strike user, Strike can associate my public key with drugs, and that and that, you know, could put me on a blacklist of some extent. So, like, even if and I give an invoice, I don't know how they're gonna pay me. So like they pay may pay with their node or they pay with strike and if But if they paid with strike or another custodian then now they link me to drugs and that's that's no bueno.
2276
03:17:29.900 --> 03:17:30.220
2277
03:17:31.500 --> 03:17:40.915
yeah. I guess last note, don't use custodial wallets that take your personal identifying information and buy drugs on the Internet, but, we're out of time. So,
2278
03:17:41.295 --> 03:17:43.555
thanks everybody for doing this. This was a blast.
2279
03:17:56.654 --> 03:17:57.635
2280
03:17:58.095 --> 03:17:58.675
2281
03:18:00.400 --> 03:18:03.780